There is no doubt about the fact that, very soon; countries all over the world will witness recession.
United State, Italy, Spain, China, United Kingdom among others are going through tough times now as thousands have died already in those countries.
There is no gain saying the fact that, the kind of COVID 19 that killed people in their thousands in other countries in Europe seems to lose the killing power when it arrives at our Shore in Africa and most especially, Nigeria.
For whatever reason; we have something to be proud of.
Like a Yoruba Proverb that I heard when I was in Primary School thus " A dirty person may not have everything but not that of Smell...Smell is part of the stock in trade of dirty people."
We may not have all the Medical facilities which is as a result of bad governance over the years, but as for Immune System ..we are ahead of the world. Thank God for that. Corona type in Italy, Spain, China, UK and US could have wiped us off.( If it is Corona and not 5 G anyway..That is another matter for Empirical Study though )
Having said that; when the crisis is over; Investors will.be looking for a country where $1m can be N400m or more.
What that imply is that; they need not engage in any serious productive economic activity. They will.merely operate in a rent economic system.
Let me break it down.
If an Investor comes in to Nigeria with $1m and he gets N400m; he can buy 10 houses of N40m each.
Having become a monopoly leader, he can sell at N60m or even more , shortly after and that of course to Nigerians.
He would have used $1m to now, own N600m or more within a short time.
When a single dollar exchange for an amount as huge as N400 and in fact about N415 to $1 in the parallel market yesterday( 4th April, 2020); then Investors will come in and ride on us.They are riding on us already though .
$1m is just 3.5m in UAE and as such you can only be times three and half richer in Dubai if you enter with your dollar.
Therefore; Nigeria should take steps to prove that we are not foolish . We do know that some Nigerians keeping funds in Dollar with intention to oppress us will not like it.
Any government that want Transformation cannot continue to do what the oppressors want always.
It is therefore imperative to see how we can bring $1 to exchange for N50 .
How can we achieve that.
We can re-denominate the naira. N1000 notes can then become just N50 or at worst N100.
I recall I was in Ghana at a time following deliberate policy that followed the re-denominate of their currency and today they are doing well.
One of the measures that Ghana put in place to control the value of Ghana Cedes in 2012 was that we went to Bank at East Legon one day and we were told that all Domiciliary Account Cheques will no longer be honoured.
We went to Oxford Street in Accra , hoping we could transact, the same policy was effective nationawide.
We were forced to withdraw Ghana currency equivalent. Fantastic policy.
You can send any amount you like to Ghana in Dollar or Pounds as Investors but you cannot withdraw Foreign Currency out of your account.Serious minded People.
Banks were honest and they obey their Apex Bank immediately nationwide.
I love them the more despite the fact that I was affected .
We can do something.
It is shameful for anyone to come here and $1m becomes N400m . That margin is too wide.
All Banks can allow Dollar or any foreign currency but you will be paid equivalent in Naira.
Once that is done; we would have eliminated the use of foreign currency as medium of exchange.
After some times..Naira will become so strong and then Imvestors will respect our country.
I suggest therefore to the Minister of Finance; Governor of Central Bank and other relevant Profesional Bodies to set this in.motion as we cannot continue to do things the same way.
Most of the BDC owners operates a rent Economy.You get $1m from.CBN at 306 and sell at N400. Once that $1m.is sold, the BDC makes N94m instantly.(N400 less N306). This is even a.modest rate as it has reached even N420 to a dollar in the last 3 weeks.
The Economic situation in.Nigeria does not require a Rocket Science approach.
We need to be sincere .We need Economic Team that will take the Bull by the Horn.
We must not pretend as if we deserve such ridiculous exchange rate.
God bless Nigeria.
Dr. Gbenga Adeoye holds a PhD in Management Accounting.He is a Fellow of ICAN and a fellow of the Chartered Institute of Taxation of Nigeria.He is an Arbitrator of UK and Nigeria.
He is the Managing Partner of Gbenga Adeoye & Co.( Chartered Accountants)
He can be reached on gbengaglobal@gmail.com
No comments:
Post a Comment