On Thursday, Nigeria’s President Bola Tinubu inaugurated the National Economic Council (NEC), expressing his commitment to sustaining the revitalization of the nation’s economy.

In his address to the council, Tinubu urged its members, the governors of the federation, to collaborate and support his administration’s efforts in transforming the country’s economy. He reminded them of the eight priority areas outlined in his inaugural speech, which include security, economy, job creation, agriculture, and infrastructure, among others.

Tinubu acknowledged the enormity of the task of growing the economy but emphasized that he and the governors should not complain, instead highlighting the importance of harnessing the nation’s potential to drive substantial growth. The NEC’s inauguration took place one week after President Tinubu directed the council to convene and devise interventions to mitigate the impact of petroleum subsidies.

Concluding his remarks, the president reiterated that collaboration among NEC members is essential and should not be seen as a crime. The meeting began with the presence of several governors from various states, including Kwara, Osun, Kogi, Ekiti, Nasarawa, Akwa Ibom, Enugu, Cross River, Plateau, Kebbi, Katsina, and Benue, among others.

Additionally, key figures in attendance included the Secretary to the Government of the Federation, the Chief of Staff, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), the Acting Accountant General of the Federation, the Acting Governor of the Central Bank, and Permanent Secretaries from the Budget and National Planning and Federal Capital Territory Administration departments.

The president also approved on Thursday, the appointment of the following as Special Advisers:

 Mr. Dele Alake Special Adviser, Special Duties, Communications and Strategy 

Mr. Yau Darazo Special Adviser, Political and Intergovernmental Affairs 

Mr. Wale Edun Special Adviser, Monetary Policies 

Mrs. Olu Verheijen Special Adviser, Energy 

Mr. Zachaeus Adedeji Special Adviser, Revenue 

Mr. Nuhu Ribadu Special Adviser, Security 

Mr. John Ugochukwu Uwajumogu Special Adviser, Industry, Trade and Investment. 

Dr (Mrs.) Salma Ibrahim Anas Special Adviser, Health.

The Ribadu’s surprise

However, the appointment of Ribadu has raised eyebrows. In 2007, Ribadu as the Chairman of the Economic Financial Crimes Commission (EFCC), declared before the Senate that Tinubu, the then Lagos State governor, was among the top five stealing governors.

Other governors mentioned by Ribadu included Orji Uzor Kalu, Ahmed Sani yerima, George Akume, and Abudulahi Adamu. He told the Senate that Tinubu’s corruption was so deep that it had an international dimension to it.

Thus, it’s surprising to see Ribadu, who was revered as an anticorruption czar during his time as the head of Nigeria’s anti-graft agency, support, and work for Tinubu, who he indicted and declared “not fit to hold public positions.”

To the interim Central Bank of Nigeria governor, I have this village suggestion to make: the strength, power and redemption of the Naira will not come from the absolute policies in the headquarters of the Central Bank of Nigeria, but through what happens in warehouses, factories, etc (the old and new types) across Nigeria. 

So, any playbook which is designed to help the Naira must consider how those old and modern factories will contribute to Nigeria’s balance of trade and payment through production.

More than 100 years ago, the most powerful currency in the world was the British pound sterling. Then Britain was the world’s center of production innovation. Even when the US economy overtook the UK in the late 1880s, the GBP was still the global reserve currency.

But as the US gained through better balance of trade and payment, the US dollar became more powerful. Over time, the world shifted to the dollar. Going back centuries, the Chinese Yuan was even absolutely dominant. In short, during the Tang dynasty, paper money was invented as China ruled economically. In the last ten centuries in our modern global history, China has ruled at least six economically (the Tang, Song, Mongol Empire, Yuan, etc). 

It is expected that in decades, the Yuan will challenge the US dollar heavily because – again – what makes currencies STRONG are happening in China: production with strong balance of payment and trade. 

Nigeria needs to make things – physical, service, digital, etc – as those are the only ways the Naira can fight globally in the league of currencies! You cannot fix via bank branches, only the warehouses and factories (old and new) will redeem the Naira. Good luck.

The history of money is deep; to the cowries and to the barter. Yes, humans have always figured out how to exchange goods and services for value. And across centuries and kingdoms, the quest for improving the efficiency of that exchange has remained. A moment came in 7th century China when the  Tang dynasty invented paper currency. Later on, the Song dynasty in the 11th century made it popular. The Mongol Empire and Yuan dynasty scaled it. The trajectory to frictionless exchange has never stopped.

Comment on Feed

Comment 1: Exactly my thought. Floating the naira will not lead to increased production & export, which would in turn have led to increased availability of FX. Before the naira became this weak, this policy could have helped the economy significantly; However, right now, its only going to increase the pressure on naira and sink it lower. I doubt that the timing is right for this policy.

Comment 2: Well said Prof. Improved balance of trade or else we will go back to shoring up the Naira and Fuel subsidy in no time. The population is there to be used to achieve the balance of trade.

Comment 3: I couldn’t agree more, Professor Ndubuisi Ekekwe. The strength of a nation’s currency is not solely dependent on the policies made in the central bank’s headquarters, but on the productivity and innovation happening in warehouses, factories, and other sectors. Nigeria needs to focus on making things – tangible, intangible, and digital – to redeem the Naira and compete with other global currencies. It’s time to shift our attention towards production and trade balance, just like how the US dollar gained dominance through better trade and payment balances. It’s time for Nigeria to step up and create a production revolution that will lead to the redemption of the Naira. Good luck to us all!

Comment 4: Thank you Prof – for the free advice.

Think of currency as a product – then apply the simple law of demand – you’ll see that a currency will rise in value only when there’s a demand for it. So long as there’s plenty Naira demanding for Dollar, without a balancing demand – the Naira will continue on its journey of paralysis. Balance of Trade through export and import is the only sustainable way to manage the value and stability of a currency!

Comment 5: The strength of our Naira is rooted in production which both fiscal and monetary agents must unearth beginning with import substitution strategy as a quick win to salvage the unintended consequences of a free fall in the value of our currency.

Comment 6: Well said Ndubuisi Ekekwe, I thought I was the only one not moved with the usual ‘kinetic’ activities at CBN headquarters each time a new lead is announced. Whether you float or swim the naira, value can only be sustained with visible and measurable increase in production. We still dey play.

Comment 7: Great insights! Ndubuisi Ekekwe I completely agree that the strength and redemption of the Naira lie in the productive capacity of Nigeria, rather than solely relying on policies formulated at the Central Bank headquarters. Your reference to the historical dominance of currencies like the British pound sterling and the Chinese Yuan highlights the correlation between economic production and currency strength.
To ensure the long-term stability of the Naira, Nigeria should focus on fostering a thriving ecosystem of warehouses, factories, and other industries. By promoting local production, both physical and digital, and encouraging a favorable balance of trade and payment, Nigeria can enhance its economic power and potentially challenge dominant global currencies.

It’s crucial for the interim Central Bank governor and policymakers to recognize the significance of these factors and prioritize initiatives that support the growth and development of Nigeria’s productive sectors. I wish them the best of luck in their endeavors to strengthen the Naira and drive sustainable economic progress.

Comment 8: Real issues Ndubuisi Ekekwe. Nigeria has turned to a big financial intermediary where all we do is use fees, taxes and arbitrage to generate income for a limited few. Well, we are gradually reaching saturation for this business model…you can’t flog a dead horse. Now, we need to actually produce something. Goods, services and real value that can be exported. Rejuvenation of physical assets and reallocation of resources. Back to the drawing board!

My Response: “Now, we need to actually produce something.” – nothing but the truth. And our policy makers must work to provide platforms to make that possible.

Comment 9: Prof Ndubuisi Ekekwe what’s your take on the new FX policy? The one that ensures Naira is sold at the I&E, effectively unifying the disparity between black market and CBN rate?

My Response: I just stated my opinion. Policies from CBN HQ cannot maintain the equilibrium. It comes down to if Willing Buyer, Willing Seller can come into a transaction at scale. If demand and supply can attain equilibrium, things will work. Otherwise, Naira will keep losing grounds.

The Washington Post’s CEO and publisher Fred Ryan is stepping down. In an entry, LinkedIn News wrote thus, ‘While The Post is considered a “premier journalistic institution,” its subscriber growth has stalled and the paper, as a result, has “struggled to maintain momentum.”’ Amazon’s Bezos owns the company.

As a new leader takes over, I have the following suggestion: return back to your root of unaligned journalism. In other words, inform and educate and try not to take sides. Like the Guardian (UK), CNN and BBC (geopolitics),  Washington Post does not inform in a fair and balanced way anymore. That is why many subscribers are leaving! (My focus is not on the tribal news organizations like Fox and NBC which are evidently biased; my focus is on the pretenders which claim they’re on the center.)

When you take a side as a paper, it becomes really hard to inform, impartially. You can pick many articles which these outlets are writing, and see how illogical they have become. Take this CNN one titled “Exclusive: Ukrainian troops witnessed Russian soldiers swept away in dam breach floodwaters”. As it blamed Russia for the collapse, not considering the illogical situation where a military will destroy a dam that would kill many of its soldiers, it dropped this line “The Russian units in harm’s way may not have been warned, possibly to maintain the element of surprise, Pidlisnyi said.”

Yes, your units with dozens of soldiers could not be informed to leave their positions before you throw a grenade or send a missile to blow up a dam which you know will kill them. The old CNN would not have published that because it was illogical. Washington Post, Guardian, BBC, etc do this daily.

Sure – this is not about the support or against a war; I just want decent journalism. The media has power and all the players must use the power with civility, honour and decency. 

I have noted that I have taken time to read New York Times chronicles of the Biafra War from 1967 to 1970. In March 1969, the New York Times reported extensively on attacks which killed 420 civilians in open markets (Ozu-Abam, etc) in Abia State, 15 miles from the front lines.I checked the Guardian and BBC, there were no such entries. 

I asked why they did not want the British people to know about these civilian attacks? I learned something about the power of the media: the British people did not even know what was happening in Biafra because the supposedly impartial media houses were not telling the whole truth, focusing on the government narratives.

 I wish The Post good luck. But unless it returns back to the root of impartial non-blinded journalism, nothing will change on the user growth.

Comment on Feed

Comment 1: “When you take a side as a paper, it becomes really hard to inform, impartially “ Well, Foxnews took a side and viewership has been booming.

My Response: Fox News is a tribal news media and does not pretend. The challenge is when you try to pretend. I did not include Fox, NBC, etc because they do not pretend. I included CNN because it pretends.

Comment 2: Impartial non-blinded journalism doesn’t improve user growth.

My Response: If you are tribal, focus on it as extreme and you will find value. The issue is pretending. I will not include Fox, NBC, etc because they’re tribal. I was writing on the pretenders like BBC.

After the decision to float the naira on Wednesday, the Central Bank of Nigeria (CBN) has released its operational guidelines for transactions in the FX market.

The guidelines, which are directed towards authorized dealers and the general public, have officially abolished the contentious multiple exchange rate windows.

Earlier on Wednesday, the CBN announced the floatation of the naira, dismantling the controlling grip it had on Nigeria’s foreign exchange market.

The move has collapsed different exchange market rates into the Investor and Exporter window, which now is reportedly trading at N664.04 per dollar.  The official CBN rate stood around N461 per dollar before the floatation.

Experts have applauded the move, noting that among many other benefits, it will boost Foreign Direct Investment. However, some concerns have been raised.

“The CBN decision is a good development, hoping that unnecessary arbitrage (round tripping) would be eliminated from the market,” Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, said.

“We expect that the foreign exchange rate will trend downwards when foreign capital inflow increases, following from these.

“The negative side is that many assets or foreign sector related to Naira prices, like external debt, among others, will be adjusted upwards with some minimal effects on inflation.

“Inflationary effects may not be much, given that many economic agents had been sourcing for their foreign exchange at the parallel market before now.”

However, the CBN has outlined the following changes to the operations of the FX Market:

• Abolishment of segmentation. All segments are now collapsed into the investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
• Re-introduction of the “Willing Buyer, Willing Seller” model at the I&E Window. Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/08/007.
• All eligible transactions are permitted to access foreign exchange at this window.
• The operational rate for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two (2) decimal places.
• Proscription of trading limits on oversold FX positions with permission to hedge short positions with OTC futures. Limits on overbought positions shall be zero.
• Re-introduction of order-based two-way quotes, with bid-ask spread of A1. Al transactions shall be cleared by a Central Counter Party (CCP).
• Reintroduction of Order Book to ensure transparency of orders and seamless execution of trades.
• The operational hours of trades shall be from 9am to 4pm, Nigeria time.
• Cessation of RT200 Rebate Scheme and the Naira4Dollar Remittance Scheme, with effect from 30 June 2023.

The CBN said further guidance on these matters shall be communicated in due course.