The Naira: Between Doyin Salami’s elitism and Buhari’s populism

By Anthony Ogbole
It is re-assuring to know that the monetary, fiscal and political authorities are collectively agreed to the fact that further devaluation of the naira is not in the interest of Nigeria given the vulnerabilities of our economy. The Central Bank Governor, Mr. Godwin Emefiele’s stance against un-managed devaluation has been unmistakably clear and well argued: the country is too dependent on exports, lacks the productive base to benefit from devaluation. Also, the joint statement issued in response to the JP Morgan announcement excluding Nigeria from the index shows that the Ministry of Finance and the Debt Management are also in agreement with the policies of the Central Bank and indeed the Federal Government.
To cap it, President Buhari, couple of days back in France publicly gave his support to the Central bank policies when he stated categorically that “I don’t think it is healthy for us to get the naira devalued”. With this, it is clear that ‘No more Devaluation of the naira’ is the publicly stated official position of President Buhari and the Federal Government, a position that most financial experts and analysts support.
I was therefore quite surprised when I read the contrary position expressed by Doyin Salami while delivering his key note address at the ongoing Standard Bank West Africa investors’ conference, tagged: ‘Nigeria: From Promise to Progress’. Speaking at the event, Salami is quoted to have said that “I am pretty clear in my mind that I will rather Nigeria maintain independent monetary policy because that gives us the capacity to react to domestic exigencies and a market determined exchange rate. I will rather that the price of currency is determined by demand and supply rather than any administrative determination”.
What this statement implies is that Doyin Salami would rather the country allows a full devaluation, a position that runs contrary to that of President Buhari and the monetary/fiscal authorities in Nigeria. His preference for Independent monetary policy means that he expects the Central Bank to remove all capital controls that are by the way only meant to curb speculative attacks and the flow of illicit funds and allow a full float of the exchange rate. That he prefers that the price of the naira should be determined strictly by the forces of demand and supply shows that Doyin Salami is clearly in support of the attempts by JP Morgan to pressure the country into allowing the free fall of the naira. Expectedly, he has become the ‘credible’ voice of local opposition against the federal government’s position that is cited copiously by hostile foreign media like Bloomberg in their negative commentaries against Nigeria. What Salami fails to know is that the analysis of the foreign media are almost always lacking in objectivity and in this instance sponsored by global cartels of currency speculators and manipulators looking to make a profit from our crisis.
That an experienced economist in the mold of Doyin Salami would support a move that will lead to mass suffering, poverty, unemployment, loss of jobs, hike in inflation rate and position Nigeria for a quick recession is very unfortunate.
His very anti-people and anti-Buhari stance further lends credence to the fact that the elitist economist is far removed from the economic realities of Nigeria; is grossly insensitive to the misery that will become the lot of most Nigerians less privileged than he is in the event of a full devaluation, which he recommends and has absolutely no role to play in a pro-people government that is being led by the grass roots oriented President Muhammadu Buhari. Such a posture sells him out as someone who lacks the social intelligence to initiate or make key inputs into policies that will promote the well-being of ordinary Nigerians.
For those who do not know who Doyin Salami is, a little introduction would suffice for a better understanding of the contradictions which he exemplifies. Doyin Salami holds a PhD from Queen Mary College, University of London, is a key member of the Monetary Policy Committee of the Central Bank and served as the Vice Chairman of the 18 member APC Transition Committee. He is also been touted for appointment as a member of the President’s economic management team. Currently, he is a senior lecturer at Lagos Business School (LBS).
As someone who has been in around top government circles for some time now and possible involvement in the new government his contrary positions on such key matters are a cause of concern. Clearly his economic philosophy cannot be said to be in tandem with that of President Buhari.
He was one of the Central Bank MPC members that viciously opposed and criticized the decision of the MPC Committee to authorize the ban on forex for the importation of forty items that can be produced locally like toothpicks, tomato, rice, poultry, palm oil etc so as to curtail the depletion of foreign reserves and promote local production of the goods. His reaction which questioned his sense of loyalty was that “The credibility that CBN has carefully cultivated, if not lost, is most certainly undermined”.
It is rather strange that Salami chose to oppose an MPC policy meant to stimulate growth, ratified by majority of the MPC members and fully supported by President Buhari. Speaking recently in France, President Buhari said that “things like toothpicks and rice, Nigeria can produce enough of those. We don’t need to give our hard currency on that, but those who insist on having toothpick from Europe or from China, instead of using Nigerian toothpick, they can go and source their foreign exchange”. The varying attitudes towards such major policy actions shows clearly that the elitist economic philosophy of Doyin Salami cannot fit into the grass roots economic inclination of the President.
Salami’s argument that the Central Bank must choose two of the three options before it, which he said, are: fixed exchange rate, maintain monetary independence, and capital mobility is however right, but only to an extent. What he does not seem to understand is that the Central Bank is not operating a fixed exchange rate per se. Any discerning observer would know that the Central Bank has through its actions sanctioned by majority of the members of the monetary policy committee of which he is key member already made its choice which is capital mobility and independent monetary policy – (though managed). As a member of the MPC it behooves on Salami to always accept the decision arrived at by majority of the members of the committee.
His simplistic analysis of the options available to the Central Bank shows that he does not really understand the very delicate, cliff hanger situation that the country is facing at the moment. Any wrong or ill advised move by the monetary authorities will have the country tilt over the cliff into recession, a situation that spell disaster for millions of Nigerians, while currency speculators would make a kill from the fall in the value of naira. This clearly should not be the preference of a patriotic Nigerian. Patriotic Nigerians should not promote actions that will enable foreigners take advantage of the misery of millions of Nigerians to make a profit. What good does Salami think allowing a full depreciation of the naira poses for Nigeria? It is clearly not wealth but more poverty. Ogbole, public policy analyst wrote from Abuja