Opinion I On Nigeria-China Swap Deal

ON NIGERIA-CHINA SWAP DEAL

        

     Two years ago, Nigeria and China under the watch of President Muhammadu Buhari, graciously entered into a 2.5 billion dollar worth currency swap deal.

        It’s noteworthy that a currency swap deal allows two institutions to easily exchange payments in one local currency for equivalent amounts in order to facilitate bilateral settlements and provide liquidity support to financial markets.

        It would be recalled that some time in 2014, the then Deputy Governor of the Central Bank of Nigeria (CBN), Mr. Kingsley Moghalu disclosed that the apex bank was looking into increasing the percentage of the Chinese Yuan (Renminbi) foreign reserves in its possession from two to seven per cent. He further clarified that about 85% of the Nigeria’s foreign reserves was in the US dollar and it needed to have more in Yuan as China was taking a more important place in global trade.

        In a bid to throw more light, Mr. Moghalu said “it is clear to us that the future of international economics and trade will shift in large part to business with and by China. Ultimately, the Renminbi is likely to become a global convertible currency”. It is gathered that since 2014, the world market has recognized the Renminbi (RMB) as a likely global reserve currency, a replacement for the dollar, thereby making some African countries like Ghana, South Africa and Zimbabwe to inculcate the currency in their respective foreign reserves.

        Recently, precisely few weeks back, the Godwin Emefelie-led CBN and the Yi Gang-led People’s Bank of China (PBC) commenced the execution of the $2.5bn currency swap deal. The bilateral pact will allow both sides to swap a total of 15 billion RMB ($2.5bn) for 720 billion naira, or vice-versa, in the next three years.

        The business relation, whose duration can be extended by mutual consent, makes Nigeria to become about the fourth country on the African continent to have such deal with China, following the aforementioned three African nations.

       It’s worthy of note that the transaction is primarily aimed at providing adequate local currency liquidity for Nigeria and Chinese industrialists and other businesses towards reducing their hurdles in the search for a third currency such as the US dollar, Euro or Pounds sterling, as the case might be.

       The CBN’s Acting Director on Corporate Communications, Mr. Isaac Okorafor explained that, henceforth, the Chinese businesses would get naira liquidity and the Nigerian businesses would, in reciprocation, acquire RMB liquidity under the agreement. According to him, the deal would improve the speed, convenience and volume of transactions between both countries; it would equally assist them in their foreign exchange reserves management, enhance financial stability and promote broader economic cooperation among them.

        Mr. Okorafor further highlighted that the bilateral pact “will make it easier for Nigerian small and medium enterprises and cottage industries to import raw materials, spare-parts and machines. To facilitate their imports, they can get RMB facility from Nigerian banks without being exposed to the difficulties of seeking other scarce foreign currencies”.

        It’s imperative to acknowledge that an economic deal of this kind is usually accompanied with numerous merits. The swap pact as it stands has the potential of boosting the Nigeria’s foreign reserve, thus assuring the stability of the country’s foreign exchange market.

       Similarly, the deal is liable to elevate the outlook of the country’s currency, naira in the international sphere. It will in the process hold the naira in high repute in the global market, because the currency will be made available in the Chinese apex bank and other financial institutions domiciled therein. Hence, it will make the businessmen resident in China, not just Chinese nationals, to assess the naira with ease while transacting with their Nigerian counterparts.      

       We, however, needn’t sweep the likely demerits of the deal under the carpet. The bilateral policy might in the long run instigate us to demand more from China. This foreseen negative effect, which will consequently intensify importation, ought to be a factor of great worry to any concerned Nigerian considering what the implications would entail.

       Just like my candid analysis on the recent move by the United Kingdom (UK). It’s not anymore news that recently the UK’s Export Finance Agency disclosed its intent to add naira to its list of pre-approved currencies, allowing it to provide financing for transactions with Nigerian businesses dominated in the local currency. The policy was summarily targeted to accept naira as a legal tender in the British market.

        Policies of such, though have the tendency of boosting the naira in the international sphere can pose more harm as the journey progresses. It is obvious that Nigeria has little, or perhaps nothing, to offer to China as regards exportation. On the other hand, acknowledging that China is presently one of the leading global economies in the area of technology, it isn’t sceptical that the Asian country has absolutely a lot to offer to Nigeria while discussing importation.

       The above assertion is the reason we shouldn’t jubilate in haste regarding the bilateral relation. Although the CBN has assured Nigerians that the 2015 ban on 41 commodities in regard to foreign exchange remains sacrosanct hence the swap deal wouldn’t make Nigeria emerge a dumping ground for the Chinese products, it’s pertinent to notify the apex bank that if apt measure isn’t taken, the assurance will hold no water in the nearest future.

       We aren’t unaware that the parallel market otherwise known as black market, which is apparently harboured in the Nigeria’s foreign exchange market, is on a daily basis gaining momentum in the country. In view of this, the importers domiciled in the country can still have their way via the assistance of the unscrupulous currency speculators.

        Since it’s not equally false that our various borders are still porous, it’s an indication that if the RMB is eventually assessed by the importers through any available channel within their reach, the goods and services from the Chinese markets can easily be smuggled into the country.

        As we celebrate this milestone, it’s crucial to enjoin the Buhari-led government to concentrate more on diversifying the country’s economy as we were earlier promised to enable China have more to request from Nigeria, so that, the bilateral deal wouldn’t lead to an imbalanced transactions cum benefits. Think about it!  

Comrade Fred Nwaozor

- Policy analyst & Rights activist -

National Coordinator, Right Thinkers Movement

______________________________

frednwaozor@gmail.com

+2348028608056

Follow me: @mediambassador

                      

Opinion I Nigeria, 19 Yrs After; Buhari, 3 Yrs On

NIGERIA, 19 YRS AFTER; BUHARI, 3 YRS ON

        Penultimate week, the Nigeria’s democratic system elatedly clocked nineteen. Though the country had from the outset been experiencing – at intervals – democratic leadership, it’s emergence in 1999 which marked the fourth republic hasn’t been interrupted till date.

        This signifies that we’ve thus far, since 1999, enjoyed an uninterruptible democracy. It suffices to say that the style of leadership in question has consecutively lasted for 19 years without interruption, hence has apparently come to stay.

        In spite of the countless challenges so far witnessed in the country’s civil rule, there’s one big reason for the citizenry to celebrate the aforementioned milestone. The reason remains that, the worst democratic sphere is far better than the best autocratic rule or any other.

        This implies that as we groan over the devastating pattern of democracy being harboured in the most populous and popular black nation, we ought to be consoled by the fact that democracy can never in any way be equated with autocracy, hence are not unlike two parallel lines that have no meeting point.

        It would be recalled that the People’s Democratic Party (PDP) premiered the leadership of the ongoing republic. Chief Olusegun Obasanjo was at the helm of affairs at the time. Nigerians were of the view that soonest the country would be ushered into the long awaited Promised Land. But pathetically, eight years after, no tangible development was recorded.

        The show of uncertainty continued unabated till 2015 when a merger party branded as the All Progressives Congress (APC) surprisingly unseated the ruling PDP via the mandate of the people’s votes. The defeat was not unconnected with the fact that the citizens yearned for a change having ostensibly gotten weary of the PDP’s administration.

        President Muhammadu Buhari who came on board in 2015 under the auspices of the APC, celebrated his 3 years in office last Tuesday. It’s worthy of note that prior to his victory at the polls, his party was able to attract the attention of the teeming Nigerians with the aid of its change mantra.

        In his acceptance nationwide speech after the election, Pres. Buhari pledged that, under his watch, the lingered societal plights such as insecurity, corruption and epileptic economy shall be addressed headlong.

        Ironically, as the journey progressed in the course of tackling the Boko Haram menace which was mainly occurring in the North Eastern part of Nigeria, other security challenges abruptly sprang up in virtually all the parts of the country.

        In the area of corruption fight, he has succeeded in minimizing some ugly situations that used to be the order of the day in the public service through the fierce implementation of the Treasury Single Account (TSA) and the Bank Verification Number (BVN).

        However, the people are baffled that despite the various ongoing court proceedings, no single conviction had been recorded, perhaps owing to the notion that “corruption is fighting back” as recently alleged by the government, not until barely last week when an erstwhile governor of Taraba State Jolly Nyame was served a verdict.

        The economy cannot be left out while dissecting the overall leadership stride of the present administration. Recession came into place the moment the Buhari-led government took over the mantle of leadership reportedly as a result of the drastic decline in the oil price.

        In view of the recessionary era, several firms operating across the country became bankrupt thereby leading to redundancy. Nevertheless, we must acknowledge that even if the PDP was still in charge, the recession wouldn’t have been avoided.

         Although the president disclosed in his Democracy Day speech that the country’s foreign reserve had “improved significantly” to $47.5bn as of May, 2018 as against $29.6bn in 2015, it’s difficult to believe considering that importation isn’t yet curtailed because foreign products still abound in the country.

       The address equally told us that inflationary rate had “consistently reduced every month since January 2017”, but currently, the prices of goods and services in our numerous markets still endlessly skyrocket.

        On agriculture, Mr. President categorically informed that rice importation had been “cut down by 90%”, but till date, our various markets are engulfed in foreign-made rice. As I write, you would hardly see a home in the country that mainly consumes locally-made grains.

         The president further boasted about the effectiveness of the ongoing Social Investment Programmes (SIP). It’s mind-boggling that the various initiatives embedded in the said programmes are yet to meaningfully solve the problems of unemployment and hunger that informed their implementation.

         It was saddening that the Mr. President’s 35-paragraph address didn’t address issues concerning the inevitable health sector, especially taking into cognizance that the Joint Health Sector Union (JOHESU) was still on strike during the period in review. Similarly, the proposal for workers’ minimum wage increment was tactically, or perhaps mistakenly, omitted.

        Pres. Buhari concluded by promising that the ‘Not too young to run’ bill would soonest be signed into law, and consequently fulfilled the pledge barely 48 hours after. The gesture shows that he truly means well for the youth. But, doesn’t his quest for re-election come 2019 indicate a paradox as regards the newest law? Think about it!     

Comrade Fred Nwaozor

- Policy analyst & Rights activist -

National Coordinator, Right Thinkers Movement

__________________________________

frednwaozor@gmail.com

+2348028608056

Twitter: @mediambassador            

Opinion I Imo APC: When Frivolities Misplace Priorities

IMO APC: WHEN PRIORITIES ARE MISPLACED WITH FRIVOLITIES

        

The last time I checked, it was obvious that even the blind could see that all is not presently well with the Imo State Chapter of the ruling All Progressives Congress (APC).

        

It suffices to assert that any member of the party domiciled in the state, who tries to pretend that all is well, is definitely deceiving him/herself. And self-deceit, which has claimed millions of souls than diseases and accidents had, would be the worst thing that would happen to the chapter’s existence if it lingers.

         

A-day-old child could boldly testify that ever since the scheduled congresses took place, or perhaps inconclusively conducted, in the state, several factions have emanated from the party and are apparently being harboured by its National Working Committee (NWC).

         

After the Ward Congress in the state, it was in the news that the man who was assigned to pilot the affairs of the political outing was nowhere to be; needless to say that he reportedly vanished into thin air with the congress materials. On the other hand, in some quarters, it was gathered that the congress held successfully as planned by the NWC.

        

The faction of the state’s governor, Chief Rochas Okorocha that alleged and insisted that no congress took place in the state was asked by the NWC to appeal their claim, and they did as instructed. Consequently, the Appeal Committee, probably after every consequential finding, reportedly concluded the exercise in favour of the other major faction known as the Allied Forces that the congress held in all the wards across the state.

        

Subsequently, the scheduled Local Government (LG) and State congresses suffered a big challenge even as their outcomes have been upheld by the NWC’s delegate to the state in spite of the claim from the governor’s faction that no such events occurred in the state in its entirety. Moreover, it’s worthy of note that the governor informed the public that a court injunction was obtained to put the state congress on hold till further notice.

        

From the onset, as expected, the happenings have kept the governor in restless mood even as he has stated publicly that he is still in charge of the party as far as the Eastern Heartland is concerned. While the other faction – equally called Imo APC Restoration Coalition – is claiming that they had succeeded in sidelining Governor Okorocha’s relevance in the party’s affairs, the governor’s faction made up of his allies and protégés has been strongly announcing that the number one citizen “is still in charge” of the day-to-day activity of the party.

        

It’s noteworthy that currently, there’s an existing parallel Executive Council (EXCO) in the APC in all the levels in the Eastern Heartland, ranging from the Ward, LG to the State level. As the governor has refused to work with the democratically elected State Chairman of the party Chief Hillary Ekeh alongside his fellow elected officers, he had in his capacity instituted his own chairman coupled with other officials.

          

This is to say the least that the heat is really on. But, I wonder how the chapter intends to participate in the elective national convention of the party come June 23, 2018 if it harbours a parallel EXCO.

         

Initially, I chose to remain mute, or act as a mere onlooker as the melodrama progressed. But having keenly observed that it has ceased to be a mere melodrama as we earlier perceived, I thought it wise to break the silence of my humble pen.

        

This implies that the emergence of this critique is informed by the compelling need to let the Imo APC stalwarts, and the members in general, comprehend the dangers inherent in the ongoing uproar and disagreement among them.

        

All the factions involved might be enjoying the anomaly, thinking it is to their advantage, not knowing it blows none of them any good. Some of the factions may be continually popping Champagne to their delight with the belief that they have gotten victory and the people’s support. I want to use this medium to disabuse them of the notion that victory has been recorded thus far, hence the need not to celebrate in haste.

         

I told the governor sometime last year that if His Excellency failed to put his house in order, by same time this year, he might be regretting his actions as a politician, Imolite as well as the leader of the APC; I equally informed him that some factions would emanate owing to the foreseen failure. At the moment, my prophecy has come to past, because the number one citizen cannot candidly tell us that he is enjoying the lingering drama, or happy with what is trending in the party.

        

As a leader of the party, I must truly say that if the governor is really concerned, he should be in a confused state at the moment. If he really cares about the wellbeing of the party coupled with his political interest, he ought to currently be nurturing some regrets, even though he has tried so far to conceal the injury sustained in the process.

         

Then, if the above observation is right, I see no reason the governor shouldn’t think of embracing a rethink. If the gospel truth must be told, the best thing that could happen to Gov. Okorocha is to have a second thought over his actions, hence the need to consider going back to the drawing board. I can’t joyfully watch his downfall; that’s the reason I’m urging him to have a rethink towards making amends where need be.

        

The injury incurred by the governor and his camp members thus far is unequivocally self-inflicted because he was busy communicating to the world that only the person he anoints in the party would emerge the next governor of the state, forgetting that no one is an Ireland.

         

I kept reiterating, and will continue to say, that no individual owns a political party or any association. An association is generally owned and managed by every member of it, thus it is very wrong for one to assume that he alone would determine what happens in a group he belongs simply because he’s involved in its leadership. Without mincing words, such an ideology is indeed misleading.

         

The other major factions of the APC ought to, on their part, endeavour to acknowledge that a divided house cannot achieve its aim, hence the need for them not to celebrate their purported victory if they are really ready to be relevant in the electioneering era come 2019.

         

So, as I enjoin Gov. Okorocha to swallow his ego with a view to retracing his steps, I enjoin his opponent to equally be troubled over the division in the family. It’s high time everyone involved in the altercation detested self-deceit. Think about it!

Comrade Fred Nwaozor

- Policy analyst & Rights activist -

National Coordinator, Right Thinkers Movement

_______________________________________

frednwaozor@gmail.com

Follow me: @mediambassador