How President Buhari can tackle Nigeria’s 30 years problem – Obasanjo’s former aide

– Professor Ade Ojowu has called on Nigerian Labour Congress (NLC) to be more dynamic in tabling their demands to the federal government

– Ojowu is a renowned Nigerian economist and former chief economic adviser to former President Olusegun Obasanjo

Professor Ade Ojowu has offered advice to the Nigerian Labour Congress (NLC) as regards engaging with the Muhammadu Buhari led government.

The renowned economist advised the NLC to demand for an expansion of employment opportunities instead of seeking for increase in wages.

Professor Ode Ojowu

This, he said, would help to reduce the ratio of people depending on each family.

His words: ”Labour should seek for an expansion of employment opportunities instead of seeking for increase in wages. So that the ratio of people depending on each family will be reduced.

”That is a more dynamic way of helping yourself than simply seeking for wages.”

The highly rated economist also questioned the overall rationale behind the call for naira devaluation adding that it would not serve any great purpose except if the objective is to maintain the dependent status of the economy.

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Ojowu, who spoke on the “State of Nigeria’s Economy and the Imperatives for a Cost-Benefit Development Analysis of the Presidential System of Government in Africa’s Largest Democracy” at a workshop organized by the Savannah Centre to x-ray Nigeria’s 17 years democratic journey noted that devaluation of the naira has been done in the last 30 years without concrete gains.

“The continued devaluation of the naira exchange rate can only bring misery to Nigeria and Nigerians as it has been doing in the last 30 years and very similar to the German experience when Structural Adjustment Programme (SAP) was forced on that country for the purpose of war reparations after the First World War.

“If the objective is to transform the economy in the long term, we need to consider the alternative of moving away from the straight jacket demand and supply economics to economics of human development in terms of relevant acquisition of knowledge and skills and technological development and in the short term interrogate seriously the details of the demand side for the dollar, a significant proportion of which is known to be fraudulent,” he said.

Responding to questions on naira devaluation, Prof Ojowu further reiterated his demand for a sensible approach to making sure that Nigeria gain from devaluation of its currency.

He said: “In Nigeria, the market economy is not developed. The structures of demand and supply are not there. If they were there …..this depreciation of the naira if we had allowed it to stay our trading partners would have gone to war with us.

“Because we have flattened their own barriers by the exchange rate and our barriers at this end has reached the high heavens because goods are not coming.  When we devalue we only pay more for imports, we don’t buy less. And when we devalue there is nothing to export. The only exportable product we have is the petroleum product which is only costing in dollars. So we do not have a market economy that can benefit from devaluation.

“That is why I said we are not structurally ready to benefit from devaluation. You see the United States of America and China……You know China was forced to use billions of dollars to pump up its yuan. Why? Because as the yuan goes down China plugs the economy of the West. The economy of the West that were already suffering from deflation were already frightened. So they had to pump up. But when our naira goes from one to four to five to six to 1000 do you hear anyone say anything to us? Because the naira is not part of the market system. The only connection between the naira and the outside world is the dollars we get from petroleum and exchange it.”

Calling for the transformation of the Nigerian market economy, Prof Ojowu said there is nothing to protect in the Nigerian economy as it is at the moment.

”I am not asking for the protection of the Nigerian economy because there is nothing in it to protect. I am saying we should use what we have to transform and change the structure.

”That is what I am saying. And you cannot change the structure by devaluating the naira because naira devaluation only keeps you at the level of dependence we have been experiencing over the years. So it depends on what the objective function is. You can still devalue.

”We have devalued now and what are we getting. For every one naira that is earned in the stock exchange market because we have devalued on expectation more than 100 million Nigerians are not sleeping because they have no food for them to eat for the day.

”Even we are talking about cost-benefit analysis you have to relate it to the economy. The market does not exist. What I am saying is that let us use invincible hand to develop a market that operates on invincible hand. But to assume that we have an invincible hand….the only invincible hand in Nigeria is only visible in through corruption. There is no invincible hand in the Nigerian market because there is no market.”

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Meanwhile, the Central Bank of Nigeria (CBN) seems set to roll out the details of the new flexible exchange rate policy which will allow the exchange rate to be determined by the supply and demand of the nation’s currency.

The policy, which throws naira into open market, paves way for one to walk into the bank and ask to buy forex at the market rate, hence, putting pressure on black market and Bureau de Change operators.

In a related development, the federal government has launched ‘N-Power’, an initiative designed to help young Nigerians acquire and develop life-long skills to become solution providers in their communities and to become players in the domestic and global markets.

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