Behold an article that has been on my mind for some time, morphing as I consider one scenario after another. A quote by the American Chuck Norris might dare to succinctly capture my thoughts as I type this article.
“I’ve always found that anything worth achieving will always have obstacles in the way and you’ve got to have that drive and determination to overcome those obstacles en route to whatever it is that you want to accomplish.”Chuck Norris
In the past weeks, many Nigerians have received emails from commercial banks gloomily informing them that their monthly transaction limit for foreign transactions is either $20 or $50, depending on the bank. Just in case you are wondering, I have not missed a zero in those numbers. While I can understand the circumstances behind the new almost-zero limit, I worry that the Central Bank of Nigeria continues to devote more energy on the demand side, whereas the greatest impact is likely to come from the supply side. It is relatively easy to appear to control demand by banning an expanding list of items, or restricting FX transactions. But if this actually works, Nigeria’s historical FX undersupply problems would have ended a long time ago.
The hard part, which we continue to either pay lip service to or handle ineffectively, is to greatly expand the FX supply. For decades, the petroleum industry has been touted as Nigeria’s biggest earner of foreign exchange. Sadly, we have still not found a way to grow other forms of export. Maybe it is because growing other sectors such as raw and processed agricultural products, tourism, manufacturing, and services would require significant rethinking of the Nigerian economy, provision of an enabling business environment, and support infrastructure. You see how difficult this route would be and how long it might take? Rather than take the arduous path of fixing the supply side, we continue to find more things to ban.
Another unrelenting example of a national commitment to unsustainable solutions is the frequent strike actions by one trade union or another. This time, it is the tireless Academic Staff Union of Universities (ASUU) beating the drums of war. Many of the strike actions usually revolve around money. Double-digit inflation in Nigeria (>10%) makes salaries lose value very rapidly, and so after a period, we have strike actions demanding higher salaries. Salaries may get increased but the cycle continues, driven by high inflation and a naira that seems determined to continue plummeting.
I have wondered if the trade unions or the government ever sit down to look at over forty years’ worth of strike actions and salary increments and think whether there might be a more sustainable solution. You see, as long as inflation rates remain high in Nigeria, salary increments would never solve the problem. At an inflation rate of 13%, it would take just over 5 years for money to lose half of its value (e.g. ₦100 becomes equal to ₦50), whereas, if inflation was as low as 2%, wiping out 50% of monetary value would need about 36 years! However, addressing the issues behind our high inflation level is really hard; requires a solid grasp of economics, political will to fix structural problems, and commitment to reforms that would transcend a single political tenure. And that is exactly why the issues remain. It is easier to apply Vaseline on our injuries than cleaning up the hazardous playground that causes the injuries.
I could go on describing other examples of our proclivity for avoiding difficult solutions, but I hope you have gotten the picture already. We cannot solve problems by always targeting low-hanging fruits. While low-hanging fruits may cure your hunger for a day, a week, or maybe a month, if you want a longer-lasting solution, you may need to climb the tree. And if you want to preserve a community, you would need to get those implements and farm the ground. This is the message for today. Selah!!
Image Credit: youth-time.eu