…Dangers of Redenomination
By Kayode Emola
Following on from last week’s analysis of the falling naira, it is worth pointing out that the current trajectory of the Central Bank of Nigeria and the Federal government to redenominate the naira is not the solution to the currency devaluation. Several countries like Ghana, Zimbabwe, Venezuela, and so on have tried it in the past and have not fared much better. Therefore, I don’t see how a currency redenomination would solve the current crises.
Instead of the government tackling the root cause of the problem, they are applying a quick-fix solution to try and shore up the currency devaluation. It was very evident in the 1990s when the then Head of State Ibrahim Babangida was trying to introduce his Structural Adjustment Programme (SAP) that Nigeria was heading in the wrong direction. To date, no tangible solution has been found on how to move Nigeria forward.
Corruption has been encouraged on a grand scale in Nigeria by successive regimes; inflation is now over the roof and the end result is a disastrous economy unable to recover. The bottom line is that the low-productivity economy we run where millions of our youth are unemployed is part of the root cause of the problem we face. Rather than solve this problem, the government is thinking of redenominating the currency.
The only thing the redenomination exercise will bring is more confusion to the populace as people will spend time working out the value of the old and new currencies. This will end up wasting peoples’ precious time thereby slowing down productivity that the country badly needs.
Take, for instance, the Ghana government redenominate their currency in 2007. At that time, the value of the cedi to the dollar was around ₵9,300 to $1. After the redenomination, the cedi became ₵0.93 to $1 and I know most Ghanaians would have been expecting their fortune to be better. Alas, 16 years after that exercise, the Ghanaian cedi is now ₵11.70 to $1.
In other words, if using the old Ghanaian cedi as our basis for economic evaluation, the true value of the Ghanaian cedi is around One hundred and seventeen thousand cedi (₵117,000 to $1) to one dollar. I am very certain that Ghanaians would have been shocked at this exchange rate had their money not been redenominated which would have forced a different reaction.
However, the redenomination has masked their true financial position, thus forcing Ghana into bankruptcy. If only the people were more aware of the damage the currency redenomination has done, they would have asked their government pertinent questions that would bring about a viable solution.
What is the way forward for Nigeria?
I am very marveled when a lot of Yoruba people in Nigeria believe that there is hope for the country, especially if it makes a monumental achievement in sports or one scholastic headline on the international stage. Nigeria has not built a society that can stand the test of time, therefore, attempting to continue in this trajectory is not going to make anything better if at all, those living in Nigeria should brace themselves for more economic hardship to come.
The Nigerian population is projected to double in the next 30 years and possibly quadruple in the next 80 years according to the United Nations projections. With the amount of poverty in the land, the number of poor people the government would have to deal with will definitely increase. With no focus on the direction of travel and possible escape from poverty, many innocent children may be born into poverty with no hope for their future.
The one thing that is clear here is that the current political leaders in Nigeria are not doing anything to help the economy grow. Not because they don’t want to, but because it is just impossible to do with the political setup of Nigeria. Nigeria as it is today was not intended to become a country, it was supposed to be a trading post, thus every element of nationhood was missing from the inception of its creation.
Taking the above illustration into account will help millions of our brainwashed Yoruba people know that they are not living in a country let alone a nation. Our people must realise that there is no way we can build a nation out of Nigeria, and forcing the constituent parts to remain as one entity is more harmful to everyone than a peaceful separation.
It is high time we all realised that the future of Nigeria is a journey to nowhere. If in doubt, check where Nigeria is coming from. When I speak with some of our naïve elders who allude to the better days when the British were still governing Nigeria. The question I ask is, do we want to bring back the British to recolonise us or do we want to get our independent Yoruba nation out of Nigeria and let other nationalities do the same? In that way, we can better govern ourselves.
Your guess is as good as mine, I would rather opt for the latter which is an independent Yoruba nation, knowing fully well, that this is the only viable solution. Taking the case of Ghana and its redenomination exercise, I am sure the Ghanaian population would have reacted differently today if they were still using the old cedi. However, because their currency has been redenominated, it has hidden the true nature of their economic collapse.
This is the direction in which Nigeria is headed unless a drastic change is forced on the system. Either we all get frustrated with poverty and force a change or continue to romanticise in fantasy waiting for the day help will come, which I doubt would come anytime soon if at all.
The only solution to this quagmire is to have every nationality go their own separate ways. Nigeria would not be the first to have broken up into several components. For those who still believe that Nigeria will be great again, they should understand that this is just a political rhetoric that means nothing.
After all, Donald Trump promised to make America great again, but I don’t think that his rhetoric has reduced the debt of America, instead, their debt is increasing on a daily basis. Those still believing in this political jamboree called democracy being practiced around the world should know that affirmative action rather than rhetoric is the only solution to our problem.
We must affirm that all we want is an independent Yoruba nation, we must educate our people on the dangers that lie ahead if we remain in Nigeria. Otherwise, I fear for the future of the children yet unborn who would be sent to this world to suffer unnecessarily for no fault of their own. I believe the time for action is now rather than sitting on the fence and hoping for the best.
