OP-UNEDITED | Buhari: The Lord of Forex – By Babatope Falade
By Babatope Falade
Based on request in a private discussion, I had to write this. A senior classmate was interested in extra private-public opinion, and he thought of me. How thoughtful. The subject is about the interview our president granted Al-Jazeera where he hinted policy direction in a domestic discussion with the interviewer.
The president said; “Not every Nigerian can afford it and the country cannot continue to subsidize the forex needs of everyone.” When asked about how he funds his kids studying abroad he said “I can afford it.”
He also stated that; “We have to consider the consequences on the economy and Nigeria as a whole. “So if some parents are finding it difficult to pay, let them return their kids to Nigeria to complete their education.”
It’s unfortunate that Nigeria is stuck in with forex challenges and will most likely struggle to satisfy local demand for forex with the pegging policy currently pursued by this administration.
However, what is most unfortunate is lack of understanding on the part of the president in his evident categorization of academic study as a lifestyle consumption of forex. The president needs to realize that asides industry, the most sustainable economy in any country is the knowledge economy.
Many people travel to satisfy a demand that can’t be met at home and probably won’t be in a while. This assertion is inferred from the poor funding of education in Nigeria as well as an age long and archaic education philosophy of rote learning. Learning devoid of practical and vocational knowledge. It’s unfortunate, that Buhari can subsidize Dangote and say that parents that have taken the initiative to send their wards abroad should bring their kids back home? Back to darkness? Back to a country where the Vice-President’s library gets more allocation that 11 polytechnics put together. Back to a country where WAE and NECO is the holy grail of education? Impossible Mr President!
Currently, according to Rabiu Samad, here 50% of Nigeria’s forex is handed to just 50 companies in Nigeria. Dangote is apparently also being subsidized with our scarce forex to build cement plants in Congo. Just imagine, parents are in need of forex to train the next generation of knowledge workers for our country, a responsibility government has failed in for years and don’t look like they will pass anytime soon and we are subsidizing Dangote’s plant according to Samad in Congo. The plant costs $292.2million.
While, I I believe that Dangote deserves support, I believe that these parents need support also. How many knowledge workers of Nigerian origin does Dangote actually employ? I am not talking about graduates that have been reduced to clerks. As a knowledge economy scholar, I have identified that the real knowledge work in many organisations are outsourced and even Dangote has many Asians and Indians doing the knowledge work in his company. If we are looking at high value citizens, that will provide more value via their learnt skills in corporate organisations and technical corporations, we need to expedite action on this Forex conundrum.
How many schools in Nigeria are doing well with STEM courses? I mean that can compete with global firms, even South African firms in Nigeria? None!
Last week, as reported by Nairametrics here, GTBank topped the list of banks that acquired forex and guess what Alhaji Aliko Dangote used half of that allocation to service his loans.
They stated; the report also claims Dangote Group purchased about $15 million out of the $31.3 million sold to GTB. According to the report, it was used for debt servicing (interest payments).
I believe that if we want to stick to this play safe forex policy, we must employ justice to the dispense of forex. Mr President can’t be subsidizing the operations of Dangote in Congo and tell us people at home can’t get their fees for quality education.
It is time to employ flexible pricing to our currency. As we speak, the pricing is already determined by the markets in the black market. The same should apply on the parallel market. This pegging is like robbing Peter to pay Paul.
A flexible pricing regime will see to the supply of forex in our money and capital markets. The issue at hand is that’s of supply and demand. The dollar is expensive because it is scarce. Supply will bring the price down. When you apply flexible pricing, you get the requisite supply. How is that difficult to understand. I think I get the point. The president made a promise many Nigerians cheered and he has to save face. He said “I will make one dollar equal to the naira”.
Buhari needs to realize that he rode to power on a wave of popular support and should stop acting like he disdains the middle class. If this disdain continues, brain drain will increase and this economy will be left at the mercy of semi-skilled citizens in a world that yearning for skilled workers. Doctors and Nurses are on the run already, same applies to other knowledge workers. I hope when Dangote finishes his projects, he will have Skilled Nigerians to do the knowledge intensive jobs. A word is enough for the wise.
Babatope Falade-Onikoyi is a public policy analyst whose focus is on the knowledge economy. He has written extensively on the subject. He is the founder of Knowledge Economy Africa and the CEO of Walter and Edwards Communications. He tweets via @topefalade
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