IMF

By Oladoja M.O

 There is a sickness far graver than malaria, deeper than cancer, and deadlier than an undiagnosed pandemic: it is the sickness of perception. A tragic, self-inflicted malaise where men and women, intoxicated by their bitterness, misread the vital signs of a nation and call it death. 

Nigeria, that African giant, that phoenix that has refused to be buried by dust or drowned by storms, stands misdiagnosed not by its enemies, but by its sons and daughters. They call for good governance, a sacred right, yet in the same breath, they auction the dignity of their fatherland for applause from foreign balconies. Climbing the stages of international conferences not as ambassadors of hope, but as broadcasters of decay, believing that to light their ambitions, the whole house must first be burned.

Yes, there are wounds, visible scars of leadership missteps and bureaucratic fatigue. Yes, the body occasionally limps, gasping for cleaner governance, for a fresher breath of accountability. But to declare her terminally ill? To parade her on global platforms like a festering corpse before she has even sneezed her last? This is malpractice of the highest order.

And yet, even as they wail, Nigeria births victories so luminous they should blind the eyes of every doubter.

In 2024, while cynics sharpened their tongues, Nigeria quietly pulled off the Dangote Refinery miracle. The largest single-train refinery in human history roared into operation. Built on African soil, by African hands, it shattered the historic curse of crude export dependency. Now, Nigeria refines for itself, and soon, for much of Africa. That is not a dying breath. That is the heartbeat of an empire in rebirth.

Even as global markets shook and economies shrank, Nigeria executed one of the most daring economic surgeries in modern African history: unifying its foreign exchange market in 2023, consolidating multiple exchange rates into a single one. The International Monetary Fund, the World Bank, and even the Wall Street Journal stood still in reluctant applause. The Nigerian naira, which was once battered by artificial valuations, finally had its freedom to fight fair. It stumbled at first, as all warriors do. However, today, stabilisation is becoming a new reality, not a distant hope.

In health, the same nation that armchair critics mock has scored historic breakthroughs. Under the leadership of Professor Muhammad Ali Pate, Nigeria has launched one of the world’s first national rollouts of the Oxford R21 malaria vaccine, a game-changing move in a country that accounts for the highest malaria deaths globally. 

Again, Nigeria has turned pain into policy. The federal government, under this administration, declared a Health Sector Renewal Compact in late 2023 (PVAC), marshalling partnerships with global giants like the World Bank and Bill and Melinda Gates Foundation, channelling billions into revamping healthcare delivery, local vaccine production, and training health workers at an unprecedented scale. No more is health an afterthought; it is now a frontline battle Nigeria is visibly winning. While others talk, Nigeria saves lives. While others point fingers, Nigeria vaccinates its future. 

Infrastructure? While “first-world” cities debate electric railways, Nigeria’s megacity, Lagos, launched its Blue Line Rail in late 2023, the country’s first electric-powered intra-city rail system. A steel artery now pulsing through a once-choked metropolis, easing congestion, breathing new possibilities. In Kano, Rivers, Abuja, and Ebonyi States, massive roads, bridges, airports, and industrial parks rose from the dust — monuments to silent nation-building.

Policy? Courageous policies thundered through governance corridors: the subsidy removal in 2023, ending decades-old economic black hole that bled over $10 billion annually. In its place: strategic investments in health insurance for the vulnerable, transport subsidies for the poorest, and agricultural revolution initiatives. The world’s harshest critics acknowledged it, but the nation’s sons spat on it, too drunk on their self-righteous venom.

In education? Nigeria has ripped the old rulebook. In 2023, the Student Loan Act was signed into law—an audacious leap toward democratising education. For the first time, children of farmers, traders, and artisans now have a gateway into universities, polytechnics, and colleges of education without fear of crushing tuition fees. 

As of 2024, the first batch of beneficiaries has received their loans under the Nigerian Education Loan Fund (NELFUND), breathing hope into homes where education once felt like a broken dream. Now, a total of 525,936 students have registered on the loan platform, with 445,015 applicants successfully applying for financial assistance, representing an 84% success rate for student loan applications under the scheme.

Meanwhile, the accreditation of degrees has also been digitised, with Nigeria becoming the first in Africa to automate this critical gatekeeping process fully. New private universities have sprouted like fresh shoots, expanding access and excellence, whilst Nigerian universities are climbing global ranks. 

They call for “change” yet campaign on the ruins of hope itself. They drape themselves in victimhood, seeking pity instead of respect. The so-called “obedient” torch-bearers, the tribe of Peter Obi, shout of patriotism while waltzing through global forums, slandering their homeland, reducing Nigeria, a giant stirring from slumber to the caricature of a failed state, just to score a few cheap political points.

Calling out leadership is democracy; Denigrating your nation is betrayal.

One builds; the other burns.

Nigeria does not need saviours who love her only when she shines. She needs sons and daughters who hold the line when the storms rage, who sing her greatness even when she falters, who plant seeds of hope, not thorns of despair, into her soil.

To those who mistake criticism for patriotism, remember:

The world does not respect nations that cannot respect themselves.

Call out your leaders.

Demand reform.

March for justice.

But never sell your mother for the price of your pride.

Because when the dust of time settles, and history opens her immortal ledger, it will not be your complaints she remembers, it will be your loyalty.

Oladoja M.O writes from Abuja and can be reached via mayokunmark@gmail.com.

By Muhammad Abubakar

Nigeria has officially cleared its outstanding debt to the International Monetary Fund (IMF), marking a significant milestone in the country’s economic recovery efforts. This development follows a series of substantial repayments totalling $1.22 billion between the fourth quarter of 2023 and the second quarter of 2024, reducing Nigeria’s IMF debt from $3.26 billion in June 2023 to $1.16 billion by June 2024.

The IMF has acknowledged Nigeria’s commitment to meeting its financial obligations, noting that the country has no overdue payments as of April 30, 2024. This achievement reflects the government’s dedication to fiscal responsibility and economic reform.

In a statement, IMF First Deputy Managing Director Gita Gopinath commended Nigeria’s efforts, stating that the country’s debt level is “moderate and not high risk,” provided that sound economic policies are maintained. She emphasised the importance of continued domestic revenue mobilisation and targeted social interventions to sustain this progress.

Nigeria’s Finance Minister, Wale Edun, highlighted the government’s initiatives to enhance social investment programmes and strengthen domestic resource mobilisation through tax reforms and digitalisation. He also noted increased crude oil production, significantly boosting national revenue.

This financial turnaround positions Nigeria to engage more robustly with international financial institutions and investors, potentially attracting increased foreign investment and fostering economic growth.

The successful clearance of IMF debt underscores Nigeria’s commitment to economic stability and sets a positive precedent for other nations facing similar challenges.

By Uzair Adam

Families worldwide are grappling with the effects of high prices, according to the Managing Director of the International Monetary Fund (IMF), Ms. Kristalina Georgieva.

Speaking at the IMF/World Bank Annual Meetings in Washington, D.C., Georgieva highlighted the ongoing challenges facing the global economy, which she described as being on a trajectory of slow growth and rising debt.

“The global economy has held up well, and inflation is gradually decreasing thanks to central banks’ coordinated efforts and easing supply chains,” Georgieva said during the Global Policy Agenda 2024 briefing.

“However, people’s optimism about their economic prospects remains low. Families are still hurting from high prices, and global growth remains sluggish.

“We project a 3.2 percent growth rate this year, slowing to an annual 3.1 percent over the next five years,” she added.

According to Georgieva, while trade has traditionally driven economic growth, it is no longer the powerful engine it once was.

The IMF report warned that the world economy risks being trapped in a cycle of lower growth, high debt, reduced government revenues, and constrained resources to support families and climate change initiatives.

The Global Policy Agenda 2024 report further indicated that the global economy is resilient, with a potential for a soft landing as inflation moderates.

However, significant uncertainty looms, with risks skewed to the downside. Public debt levels are at historic highs, projected to approach 100 percent of GDP by 2030, and geoeconomic fragmentation threatens to reverse decades of progress from cross-border economic integration.

The report also points to transformative shifts—such as the green transition, demographic changes, and digitalization, including AI—that present both challenges and opportunities for global economies.

As a response, Georgieva emphasized the importance of a policy shift aimed at escaping the cycle of low growth and high debt.

She called for monetary policies that ensure inflation stabilizes at target levels and fiscal policies that pivot toward consolidation to build resilience and maintain debt sustainability.

By Muhammed U. Hong

Nearly six decades ago, the practice of external borrowing for many developing countries could be linked to two major International Financial Institutions (IFIs): The World Bank and the International Monetary Fund (IMF). These institutions became the most significant source of finance for many third-world economies, particularly in Africa, where countries owe both institutions a large portion of their external debts. However, towards the end of the 1990s and the beginning of the 2000s, the IMF experienced a decline in lending activities in the region. 

The institution was becoming almost irrelevant as most countries were reluctant to borrow from it due to its policies and programs, notably the Structural Adjustment Program, which worsened economic and social conditions rather than improving them. As a result, the IMF’s reputation was severely damaged, and countries began to seek alternatives.

In the last two decades, China emerged as a major bilateral lender, gaining prominence for its infrastructure and economic development projects in African countries through three of its most prominent institutions: The China Exim Bank, China Development Bank, and China Agricultural Bank. This led to the rise of many other private sector entities that helped cater to the fiscal needs of developing countries.

Between 2013 – 2022, African countries’ total external public debt stock, as reported by the World Bank’s International Development Association (IDA), rose from US$109.63 billion in 2013 to US$223.74 billion in 2022. China disbursed loans over the same ten-year span, increasing from US$24.11 billion in 2013 to US$62.89 billion in 2022. As of March 2022, 34% of Africa’s total external debt was owed to multilateral creditors, such as the World Bank’s IDA and the International Bank for Reconstruction and Development (IBRD), while 23% was linked to bilateral creditors, including China and Germany. Private creditors, like Bondholders from the United Kingdom, accounted for the remaining 43%.^[1] Only a modest portion of Africa’s total external debt stock is owed to China.

External or foreign borrowing is not inherently negative for countries, including African ones. It is widely understood that virtually no country can sufficiently fund its budget by relying solely on its yearly revenue. Thus, governments resort to public debt to fulfil fiscal obligations, especially when running a deficit or intending to spend more than their revenue. In Africa, external borrowing has served as a necessary tool to fund critical domestic infrastructure projects that aim to generate developmental and social gains.

However, the criteria for borrowing—such as the type of debt, its purpose, repayment terms, currency of repayment, and borrowing conditions—play a crucial role. One key metric that lenders assess is the Public Debt-to-GDP ratio, which indicates what a country owes in relation to what it produces and thereby reflects its ability to repay the debt. The higher the Debt-to-GDP ratio, the greater the risk of default. The World Bank established that a threshold of 64% for emerging markets (such as African countries) and 77% for developed economies is where public debt may begin to impact economic growth negatively. ^[2]

Interestingly, some of the world’s leading economies, including Japan, the United States, and the United Kingdom, have the highest public debt-to-GDP ratios—241%, 114%, and 79%, respectively—while African nations such as Cabo Verde, South Africa, and Nigeria have ratios of 117%, 47%, and 20%. ^[3] This demonstrates that African countries adhere more strictly to their public debt-to-GDP limits than their Western counterparts. Nonetheless, high public debt does not necessarily indicate weak economies, as some countries can rely on other sources of revenue to offset their liabilities.

So, why does Africa find China more attractive as a lender than IFIs? The World Bank and IMF initially offered loans with favourable terms to African countries in need but came with high interest rates and stringent conditions. African governments were often required to implement reforms designed by these institutions, and the loans were subject to strict environmental, social, and governance standards. Not all African countries were willing or able to comply with these requirements, which diminished their appetite for loans from IFIs and increased their interest in China’s concessional loans, which had fewer conditions. Their “no strings attached” model made Chinese loans more accessible and did not require adherence to governance or environmental standards while offering prospects for debt moratoriums.

For example, new data shows that China’s total lending to Zambia stands at $5.05 billion, equivalent to 30% of Zambia’s external debt. About 80% of China’s loans come from low-interest, concessional finance from China’s development banks, like the China Exim Bank, with the remaining $948 million held by commercial entities such as ICBC and Huawei.^[4]  However, there are widespread reports of opacity in Chinese lending practices. African governments have been largely silent about whether loans are used for capital or recurrent expenditures, which makes it difficult for citizens to determine the health of their countries’ debt paths.

This lack of transparency raises concerns about inflated project costs, kickbacks, or the financing of white elephant projects ahead of crucial elections. The China-Africa Research Initiative (CARI), a Washington-based team of independent researchers, is one of the few reliable sources for data on Chinese loans, as it gathers information from loan contracts, interviews, and its global network.

Why do some believe Chinese loans are different from IFI loans and are designed to trap low-income countries into surrendering their natural resources? 

Public-private partnership (PPP) arrangements and the Build-Operate-Transfer (BOT) model, in which Chinese firms manage projects without fully taking over, have been common in Chinese contracts. However, African countries have begun to default on their loan commitments, leading China to adopt the more controversial resource-backed lending model. This model has been used in Africa as a fundamental way to finance many economic and social infrastructure projects like railways, telecoms, mining, construction, power, etc. 

The principle behind the resource-backed lending or resource-financed infrastructure (RFI) model, as they call it, is to allow the borrower country to commit its future revenues derived from the sale of its natural resources to pay for loans provided by the Chinese creditors. Under the RFI model, Chinese lenders have financed an average of 71 projects per year in Africa, at an average value of US$ 180 million since 2010. Between 2000 and 2019, only 26 per cent of Chinese lending in Africa has been tied to the future revenue from natural resources, with Angola taking a sizeable portion of 18 per cent alone. The remaining 8 per cent is evident in loan commitments of US$ 500 million made to Nigeria for its Abuja light rail project in 2012 and 2011 to finance new phases of its airport projects and the Lekki Port’s Free Trade Zone. Others have been used for the US$ 475 million loan in 2011 for the Addis-Ababa light rail project, and in Egypt, for a US$ 1.2 billion loan for their light rail projects.^[5] The primary risk of the RFI model is that commodity prices are volatile, which could undermine debt sustainability. 

According to CARI, in 2019, Chinese borrowings to African governments began classifying the countries that were perceived as ‘less risky’ due to concerns about debt sustainability. This is because most countries borrowing heavily from China have been identified to have histories of IMF bailouts, making new such borrowings from China unsustainable. CARI examined the situation in 17 African countries that are either in debt distress or at high risk of debt distress due to the high lending volume, which has forced China to address the issue of debt sustainability. 

Countries like Ethiopia, Mozambique, the Democratic Republic of Congo and Djibouti were all denied fresh loans in 2019. Others like Kenya, Cameroon and Zambia were given relatively small loans. Angola, the continent’s largest borrower of Chinese loans, with an average of US$ 4 billion per year between 2010 – 2018, experienced a decline to about US$106 million in 2019. This is despite securitising Angola’s future revenue from its oil exports. Nigeria, which surpasses as the continent’s largest crude oil exporter with a history of debt sustainability since 2000, had only been granted a loan commitment of around US$500 million. ^[6]

The issue of debt sustainability gained further attention during the COVID-19 pandemic, leading to widespread calls for debt relief. China responded by offering debt relief packages (debt cancellation) and an (undisclosed) deferment of interest payments due to the pandemic. In 2020, China joined the G20 to create the Debt Service Suspension Initiative (DSSI) framework to alleviate the economic suffering imposed by the Coronavirus pandemic on African countries. By the following year, China was reported to have suspended debt worth over US$1.3 billion for 23 countries, out of which 16 are African countries.^[7] In a similar vein to tackling the Coronavirus pandemic, the IMF was also reported to have approved $500 million to cancel six months of debt payments for 25 countries, with 19 of them in Africa – which is almost one-third of what China had been able to offer to African governments.^[8]

According to Jubilee Debt Campaign UK, now referred to as Debt Justice, a UK campaign organisation to end exploitation of debt by more affluent countries, China remains the largest suspender of debt with a whopping $5.7 billion in debt repayment). ^[9] The China Development Bank – which is a major lender to African countries – had also since 2021 provided US$1.168 billion in debt relief to these countries as a way of cushioning the impact of the pandemic.^[10]

What makes China engage in “debt-trap diplomacy” with its African borrowers? — An allegation that Chinese firms intentionally lend to financially irresponsible governments that will be unable to repay loans to take possession of assets.

Many unsubstantiated claims about the Chinese takeover of major state assets in developing countries exist. The most cited case for reference is the Hambantota port in Sri Lanka. The Sri Lankan government secured 2007 finance from China’s Export-Import (EXIM) Bank to develop the port. In 2015, however, Sri Lanka had to arrange a bailout from the IMF even though the Chinese loans only accounted for some 10% of the debt. The government sought to raise cash by privatising state-owned assets, including a significant stake in Hambantota port. Then, a Chinese company got wind of it and successfully bided and bought 70% of the shares. The Sri Lankan government used the proceeds to pay for Chinese loans and other debt services. ^[11] However, no definitive evidence suggests a similar practice is prevalent in Africa.^[12]

Ultimately, it is hard to think that Chinese loans to Africa are meant to inextricably trap them for their rich oil and other natural resources. Over the past decades, Africa’s growing need for infrastructure has led China to fill the void created by Western financial institutions, offering easier access to capital with fewer stipulations. 

Although the African continent has managed its debt well, there are still significant risks and challenges associated with Chinese loans, particularly in governance and transparency. It is also true that China’s approach to lending has evolved from being more lenient to becoming more cautious, especially in response to concerns about debt sustainability. This is why it tries to mitigate the risk of defaulting by primarily resorting to the resource-backed financing model, and this has only been linked to a meagre percentage of all its loan commitments to the continent– with the exception of Angola. While resource-backed lending seems pragmatic, it is not necessarily predatory or equate to an intent to exploit or trap countries, especially given China’s history of debt relief. China’s participation in debt relief efforts is consistent with its broader strategy of maintaining long-term relationships with African countries rather than exploiting them.

Africa must halt the practice of raising money at the Eurobond markets—where a range of investors trade bonds—because these bonds come at steep commercial rates and are subject to the dictates of the international financial markets. African countries must also be discouraged from seeking bailouts from financial institutions like the IMF and World Bank to offset existing loans, which excessively pile up debts that lead to unsustainable liabilities. 

African governments must ensure prudent financial management while refraining from depleting their foreign currency reserves to pay high interest on those loans. The utilisation of these loans for their intended purposes, whether in infrastructure, social or economic, is crucial for Africa to foster sustainable development, bolster its revenue growth, and improve the quality of life for its citizens. Loans that yield commensurate economic benefits.

Muhammed U. Kong wrote via muhammedu.hong@gmail.com.

By Sabiu Abdullahi  

The International Monetary Fund (IMF) has advised the Nigerian government to discontinue its “hidden subsidies” on fuel and electricity, citing the significant burden it places on the country’s economy. 

According to a recent report by the IMF, subsidies are expected to consume 3% of Nigeria’s Gross Domestic Product (GDP) in 2024, a notable increase from 1% in the previous year.

The report praised the Federal Government for its decision to gradually eliminate expensive and inequitable energy subsidies, which the IMF believes is crucial for freeing up financial resources for development initiatives, enhancing social safety nets, and ensuring sustainable debt levels. 

The IMF stated, “Once the safety net has been scaled up and inflation subsides, the government should tackle implicit fuel and electricity subsidies.”

The report noted that “with pump prices and tariffs below cost-recovery, implicit subsidy costs could increase to 3% of GDP in 2024 from 1% in 2023. These subsidies are costly and poorly targeted, with higher-income groups benefiting more than the vulnerable.” 

The body recommended that “as inflation subsides and support for the vulnerable is ramped up, costly and untargeted fuel and electricity subsidies should be removed, while, e.g., retaining a lifeline tariff.” 

The advice from the IMF comes as the Nigerian government continues to grapple with economic challenges, including a significant budget deficit and rising inflation.

The elimination of subsidies is expected to free up resources for more targeted and effective social welfare programmes, but it may also lead to increased energy costs for consumers.

By Baffa Kabiru Gwadabe

Over the past few months, Nigeria has been suffering from continuous depreciation of its currency, the naira. The naira has depreciated from barely ₦600/$ in the last three months to ₦1,300/$ today, the 27th of October 2023. This is enormous, considering the loss of value by more than 120%. Many are worried, including my little self, about this development. But the recent propositions of solutions by many provoke such a write-up.

It is good to start with some questions concerning the crisis. What is happening? What went wrong? Who is to blame? What are the ways out? What will be the lasting solutions?

The above questions may not be provided with answers, as many out there know the answers already. The focus should remain on some best practices or exchange rate regimes to hinge on. Let me start with some highlights on the developments in Nigeria’s foreign exchange market.

In 1971, when the Gold Standard was abolished under the Bretton Woods System, several foreign exchange rate management regimes were pursued in Nigeria and other parts of the world. These include the independently adjustable peg, crawling peg, independent peg, collective exchange arrangement, dual exchange and floating regimes. IMF member countries practice six (6) other exchange rate regimes, which were later compressed into three (3) regimes to include pegs, limited flexibility, and great flexibility. These were later decomposed into fifteen (15) regimes, mainly from 1975 to 1998 (see Mishkin, 2007).

All those regimes were adopted unevenly by the IMF countries. This means they practice one or more of the regimes based on their choices and persuasions. By 1999, the IMF proposed eight (8) different exchange rate regimes. They include separate legal tender, currency boards, conventional fixed (pegged against a single currency or basket of currencies or other commodities like gold), pegged within horizontal bands, crawling pegs, crawling bands, managed floating and independent floating (see Mishkin, 2007).

Still, these interchanging regimes continued in Nigeria depending on the available foreign reserves, capital inflows and current account balances. Nigeria’s forex crisis worsened in the 1980s when the US economy pursued Nigeria to devalue its currency by 10% and other scenarios. However, some attention will be given to the last ten years or so, particularly the administration of President Muhammadu Buhari or the reign of Godwin Emefiele as the CBN Governor (2014 – 2023). Some reflections would also be made on earlier antecedents before the Buhari’s and current administrations.

Nigeria has pursued two dominant exchange rate regimes: the Retail Dutch Auction System (RDAS) and the Wholesale Dutch Auction System (WDAS). The RDAS is an exchange rate regime introduced in Nigeria in 1987. It focuses on buyers (end-users or customers) of Forex (USD) to bid for the prices, and the marginal bidder is supplied with the quantities by the CBN through authorized dealers. Under the RDAS, the inept dealers are supplied less, while the highest bidders are penalized for rent-seeking and invitation for depreciation. 

The WDAS, on the other hand, is an exchange rate regime targeted at maintaining the gains of the RDAS and the continued liberalization of the forex market. The WDAS came into operation in Nigeria in February 2006 and allows authorized dealers to buy forex on their accounts rather than on behalf of end-users. Also, the authorized dealers are carefully watched by the CBN, and the dealers are also allowed to trade in the interbank forex market. During that time, the CBN pursued other special interventions of forex sales to Deposit Money Banks (DMBs) and direct sales to licensed Bureau de Change (BDCs). The CBN further mandated that DMBs increase Business Travel Allowance (BTA) and Personal Travel Allowance (PTA) from $2,500 and $2,000 to $5,000 and $4,000 per quarter, respectively. All these policies were sustained in positive directions as the naira continued to appreciate by 2.6%, 8.7% and 5.8% for 2006, 2007 and 2008, respectively.

However, at the beginning of 2009, there was an observed forex policy reversal and the reintroduction of RDAS to reduce capital outflows and depletion of foreign reserves. The interbank trading segment was suspended. This was followed by sales restriction of forex to oil companies and government agencies and sales of forex to BDCs. But towards the end of 2009, the CBN called for recapitalization of BDCs in what they call ‘Class A’, while those that did not recapitalize are called ‘Class B’ BDCs. Both ‘Class A’ and ‘Class B’ BDCs can bid a maximum of $1 million and $250,000 respectively.

Similarly, by 2016, Nigeria’s forex market was further liberalized. During the period, the average naira-dollar exchange rate was N197/$ at the interbank window, representing a depreciation of 18.7% (as the exchange rate was N160/$ before 2016). However, one worrying thing remains: the premium between the interbank and BDC sections was about 41.5%. After this, some other forex regimes were still embraced under the administration of President Buhari and Godwin Emefiele. For instance, forex primary dealers (FXPDS) and non-FXPDS were introduced into the forex market in 2017.

In addition, longer-term derivatives like forwards trading from 1 to 3 months tenor and up to 2 years were introduced. The exchange rate was relatively stabilized at averages of N231.76/$ and N351.82/$ at interbank and BDCs, respectively. This has created many arbitrage opportunities for those with access to the interbank rates to continue to worsen the forex market. Such a trend continued for 2020, 2021, 2022 and until 2023. For instance, as of March 2023, the official rate was N462/$, while in the black market, it was an average of N750/$. 

The sacking of Emefiele as the CBN Governor and the appointment of the acting CBN Governor, Mr Shunobi, in June 2023, where the latter tried to close the gap and arbitrage opportunities, moved the official rate from N474/$ to N664/$. With the appointment of substantive CBN Governor in September 2023, Mr Cardoso, the apex Bank, moved on with complete deregulation of the forex market, and this has led to incessant depreciation of the naira to a historic level of N1,300/$. However, it now appreciates an average rate of N1,000/$ and other rates depending on information and locations.

The next thing to talk about is the proposed solutions to the lingering naira-dollar crisis. However, it is important to note that the CBN’s recent and previous exchange rate policies are floating in nature or simply deregulating the forex market, and this is counterproductive as it has not provided the desired results, especially recently. This is because floating regimes are usually for export-dominant countries such as China, the United States, Japan, Germany, India, Russia and Saudi Arabia, among others, as argued by the Mundell-Fleming model. Nigeria is a predominantly import-dependent economy. As such, depreciations affect inflationary levels in the first round (exchange rate pass-through to inflation) and at the ‘second-round’, popularly known in the current literature as the ‘second-round effect’.

To end this submission, the CBN needs to do one or two things to exit from the naira-dollar crisis, and these include:

(1) Invite a small but huge ‘Conference of the Parties’ (COP) to deliberate and take appropriate decisions for implementation immediately;

(2) Under the COP, dollarization with its components; official dollarization, unofficial dollarization, partial dollarization, etc should be reviewed;

(3) Hard-peg exchange rate regime should be deliberated;

(4) Managed-floating regime should be discussed;   

(5) Most importantly, sources of the forex demand pressures must be exposed.

Baffa Kabiru Gwadabe wrote from Bayero University, Kano, via bkabirugwadabe@gmail.com.

By Mohammad Qaddam Sidq Isa (Daddy)

Now that Nigeria has finally embarked on the total implementation of the Washington Consensus package of neoliberal economic policies, what becomes of the country’s economy, in the long run, remains to be seen. 

As a product of consensus among the Washington-based World Bank, the International Monetary Fund (IMF) and the United States Department of the Treasury, the package was purportedly designed to guide developing countries bedevilled by protracted economic crises to recovery and achieve sustainable economic development. 

Also, as a capitalist template with inherent and unmistakable lopsidedness in favour of the rich and those with access to public resources, the package encourages governments to literally but gradually wash their hands of the critical economic sectors in favour of profit-oriented local and foreign investors.

Under pressure from neoliberal international financial institutions, successive Nigerian governments have gone to various extents in selective and partial implementation of the package, triggering rounds of controversy. 

However, now with the country going fully and irreversibly capitalist, there is no more time to waste in criticising capitalism and romanticising some obsolete socialist and populist ideas that are no longer realistic. After all, the reform policies can still work out if the federal government pursues requisite measures, which include, among other things, total transparency in governance, governance cost-cutting and prioritisation of the strategic sectors of the economy that have a direct bearing on people’s lives. 

In other words, for the reform to be effective, governance at all levels must be too transparent to accommodate any act of corruption; and anti-corruption measures, including appropriate punishments, must be in force and deterrent enough to deter any would-be perpetrator. 

Likewise, appropriate governance cost-cutting measures must be implemented judiciously to save resources without prejudice to productivity and efficacy.   

Equally, public spending must strictly follow the public’s priorities that entail appropriate investments in strategic sectors with clear short, medium and long-term goals measured not by mere figures but by their real effect on people’s living conditions. 

With these and other requisite measures in place, the investment atmosphere in the country will be transparent and competitive enough to attract local and foreign investors with appropriate job-creating investments that would facilitate real and sustainable economic development. 

That way, and with time, the local and foreign rent-seeking opportunists and profiteers, who have dominated the business sphere in the country, making hugely disproportionate returns compared to their real investments, will have to follow suit to remain relevant or simply lose out. 

Unless the Tinubu administration pursues these measures with appropriate commitment, the reform will end up counterproductive, thus making life even more unbearable to most Nigerians. At the same time, a tiny politico-business clique continue to wallow in abundance.

Interestingly, there has been conspicuous silence on the part of our local West-admiring Washington Consensus apologists, who have advocated total capitalist reform as the only panacea to the country’s persistent underdevelopment. Ordinarily, having passionately advocated it, they should now feel morally obliged to show some understanding, or at least fake it, over the ensuing escalating hardship in the country. 

Besides, though supposedly experts in economics and other related fields, none have developed a viable alternative economic recovery package or even introduced viable inputs to the Washington Consensus package to make it relevant to our peculiar circumstances and other underlying challenges.

Mohammad Qaddam Sidq Isa (Daddy) wrote from Dubai, UAE. He can be reached via mohammadsidq@gmail.com.

By Muhammad Aminu and Uzair Adam Imam

A Senior Lecturer at the Department of Mass Communication, Bayero University, Kano, Dr Ibrahim Siraj Adhama, has urged journalists to fact-check figures to change the narratives by the media that paint Northern Nigeria black. 

Adhama stated this at a One-Day Workshop for Early-Career Journalists on Reporting Northern Nigeria, Fake News and Journalism Ethics organized by a Kano-based online media organization, The Daily Reality. 

The workshop, which was held at Bayero University, Kano, was organized by the management team of The Daily Reality Newspaper to groom journalists in Northern Nigeria on reporting.

He said our northern reporters should have apparatuses to re-examine statistics by the World Bank and IMF, among others, before reporting them for public consumption. 

Adhama, who spoke on “Issues in Reporting Northern Nigeria: A Framing/Agenda Setting Perspective, said the north was represented in media as economically and educationally backward with a high number of out-of-school children. 

He said, “We need to stop swallowing statistics about us. Most of these statistics by the World Bank, IMF, etc., will never favour us. 

“Thus, we should have an apparatus to re-examine them before reporting them,” he added.

Speaking on how those reports affect Hausa-Muslim northerners and, by extension, other ethnic groups, Adhama maintained that all the things we read about us in the Southern media were in themselves, despite claiming objectivity, subjective.