The precipitous decimation of the value of the Naira in the past several months since the Tinubu regime came on board was driven largely by irrational and insanely greedy speculators combined with vested corrupt moneybags who had stacks of Naira in their basement and were hell bent in discrediting and undercutting the Tinubu regime by attacking our currency.
We also can not forget unpatriotic governors who were alleged to be converting their increased federal allocation into the greenback, which they stacked away in their governor residences. Their evil plot and greed caused the poor masses and the middle class so much grief with galloping inflation pricing them out of basic consumer goods like bread not to talk of critical commodity like cement whose price went as far as above 12,000. It also did tremendous damage to the Tinubu regime with shouts of “ Ebi npawa” we are hungry rendering the land. Even one of his most ardent supporters, Fuji maestro Wasiu Ayinde (aka Kwam 1), even jumped on the critic wagon.
It is, therefore, poetic justice that the evil plot of these greedy speculators and economic saboteurs has now backfired. Betting against resilient, convention-busting Nigeria remains a bad bet. We have for decades befuddled conventional economists who struggled unsuccessfully to unravel the logic behind Naijanomics, which seems to defy gravity.
People might have forgotten that not so long ago, as recently as July last year, the Naira to dollar rate war was around 750. So the Naira falling as low as nearly 1900 against the dollar defied conventional economic theory. People pointed to the removal of the oil subsidies. The sudden rebound of the Naira against the dollar, with the oil subsidies removal still in place, sticks a sharp needle into that balloon.
What’s most important now for the economy’s health is stability and predictability in the forex market to allow investors to make long-term investment plans and to curtail the price gouging behavior of Nigerian retailers. The question now is will the prices that shot through the roof on the excuse of the skyrocketing dollar to Naira rate for even non-import dependent products like gari and bush meat, come down to earth now that the Naira has regained some of its lost value. Knowing our people, I am not raising my hope too high.
Another unknown is the rumors making the round about the huge minimum wage hike being proposed for federal employees. No doubt, long suffering, underpaid Nigerian workers deserve their long overdue due raise to a living wage. The risk is that if it is not properly calibrated to the ability of the state and the private sector to pay, it might lead you to inflationary pressure and instability in the forex market. The Caddoso and CBN have their work cut out for them and have many sleepless nights ahead of them.
Finally, my heart goes out to recent “japanerians” who flung their houses and other valuables assets at hugely discounted prices to finance their japaing by the lure of earning high flying foreign currencies, but many finding out that the green grass across the fence might just be fake artificial turf. The strengthening of the Naira against the dollars throws another wrench to totally mess up their calculus.
