Naira Free Fall: Expert counsels FG to jettison US Dollar for international trade transactions

Stephen Olufemi Oni, Ilorin

An Economic Expert, Professor AbdulGafar Ijaiya, has admonished the Federal Government of Nigeria to bypass the US dollar in its international trade transactions to save the economy from its over-reliance on the US dollar.

The erudite Professor, who lectures in the Department of Economics, University if Ilorin, gave the admonition in Ilorin while fielding questions from journalists on the current economic situation in the country, especially the free fall of the naira against the US dollar, opined that with that approach, the citizens would be brought out of their current economic quagmire.

The Expert, while noting that Nigerian leaders can no longer blame the hardship of the country on the exchange rate due to its over reliance on the US dollar, suggested that the country should bypass the US dollar since the majority of its international trade transactions are done with China and other Asian countries.

He said: “You cannot continue to blame the exchange rate, no, Nigeria has been turned into a US dollar economy, so, we’re at the mercy of the US Dollar and the question is, why continue to rely on the US dollar while more than 90% of what we import into this country come from the Asian countries?

“Since more than 70% of our imports come from China, why not bypass the US dollar, do we have to go through the dollar market before we change our money to Chinese Yuan before buying things from China?

“Now, some Muslims are preparing to go to Makkah, the National Pilgrims Board has said Muslims should begin to pay part of the money as a down payment and a deadline has been given to pay almost Five million Naira. Can’t we bypass the US dollar and go straight to Saudi Riyal?”

Ijaiya, while blaming the lack of political will and commitment of the leaders, maintained that Nigeria can take cue from other countries who are already doing it.

“Bypassing the US dollar is possible, other countries are doing it. During the Buhari administration, there was an arrangement for a currency swap with China but the political will and commitment to implement it was not there, probably because America stood against it.

“The leadership of the country needs to have that strong political and independent mind to make decisions just like other countries have done in recent times.

“Just a month or two ago, Saudi Arabia and China had a bilateral currency swap agreement worth about $ 6 billion to bypass the US dollar. The United States could not do anything about it.

“When we are removing subsidies from petrol, Kenya did the same thing, there were demonstrations in Kenya and before you know it, the Kenyan President approached the Saudi Arabian Government to accept their Kenyan shillings for payment for petrol. That solves the problem of a hike in petroleum prices in Kenya.

“The newly formed international body called BRICS, -Brazil, Russia, India, China and South Africa – are now trading amongst themselves bypassing the US dollar; Egypt has joined as well as other African countries. Nigeria is yet to join BRICS. The last time members of this organization met in South Africa, Nigeria, represented by our Vice President went there as an observer. And you call us the giant of Africa.

“If we are giants, we should be in the front seat of such an important body. Do you know too, that Nigeria is yet to join the African Continental Free Trade Area (AfCFTA)? A body that would be of great benefit to Nigeria and let her rely less on the US dollar for international trade transactions, at least within Africa,” he admonished.

The Professor of Economics reiterated that the only way to get Nigeria out of its current economic mess is to bypass the US dollar, at least if we are trading with countries other than the United States, but doubt if the ruling elite, top civil servants, big business executives and top bank executives will not stand in the way of the policy due to having stored the US dollars in their banks and their homes because of greed.

The Economist recalled the use of counter trade (not different from barter trade) as a means of international trade transactions by the military administration of General Muhammadu Buhari and General Tunde Idiagbon, which bypassed the US dollar and set Nigeria on a path to prosperity. Unfortunately, he lamented, the policy was abandoned by the succeeding administration of General Babangida, who went on to introduce the Structural Adjustment Programme (SAP). An IMF and World Bank programme with devaluation, privatization of government enterprises and removal of oil subsidy as some of its conditions. That, he said, began the sojourn of our nation’s economic challenges, which to date we found difficult to get out of.

The Offa-born Economist also stated that the country would continue to struggle to revive its economy until it revives its real sector that include agriculture, mining and manufacturing.

He stressed that the moribund state of the majority of the manufacturing industries, which is calling for intervention, is contributing immensely to the economic hardship in the country.

Ijaiya also expressed his dissatisfaction with the inability of the State and local government to oversee the mining sector, noting that the sector has been hijacked under the exclusive list of the Federal Government.

He added that every state in the country could cater for its needs with the natural resources they have if it had the power to control the resources in its States and create more industries.

“The mining industry, for instance, unfortunately, states, and local governments can’t access it, but why? In the 1960s, I was born and bred in a tin mining company in Jos, the regions then took charge of the mining sector but under the Exclusive list of the Federal Government, mining was hijacked.

“There is no state that doesn’t have enough mineral resources to curtail itself; for instance, the material used for making batteries (Lithium) has been in Kwara for ages but who is in charge? The Federal Government gives licenses to individuals to mine the minerals, but unfortunately, there is no industry to process the minerals, or even to turn the mineral resources into final goods. We have to take them outside the country for processing,” he said.

The Professor of Economics blamed the current scourge of insecurity as one of the problems facing the agricultural sector, especially, banditry that has made it difficult for people to go to farm again.


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