I have written extensively on Buharism and it’s economic approach to development over the past months. I am forced to revisit it again in the face of fresh evidence that the process of reactivating the Nigerian economy is underway without much fanfare. PMB is in himself a Process; Requiring Methodical and Structured Leadership, with him the foundation must be established before anything can or will be done. In Reactivating and Sanitizing the Nigerian Economy; You first need to Control your instrument of Trade (The Nigerian Naira); You must create Effective Governmental Oversight (Ongoing); You must create the Enabling Environment for Real Investment (Not Stock Market Speculative High Yield Investment) and you must create and re-engage Local Content Producers and Manufacturers for sustaining Economic Growth; and Support Local Businesses with Subsidies and Investment/Funding. All of these are impossible without a hold on the Exchange rate (Have you ever wondered why the Chinese have never allowed the Reminbi/Yaun to freely Trade in the open market despite the pressure from the West?). So when anyone feels PMB is cherry picking issues and not setting economic policies, It is clear you have no Idea where Nigeria is coming from (A Reminder; GEJ/PDP looted and destroyed Nigeria's Societal, Moral, Financial and Economic Institutions and process for 16/6 years) and where we are headed.
PMB must start from the foundation and what foundation will you build on without stabilizing Forex and Limiting Imports? That is basic economies and common sense localization and strengthening of any economy. Nigerian Businesses will die if we continue to allow the Chinese and the West turn Nigeria into a dumping ground for goods we can produce (The Nigerian Textile, Palm Oil and Cocoa Industry readily and easily come to mind); We will not generate Employment if we cannot begin to Manufacture and Produce locally and we cannot produce locally without Governmental Policy Initiatives Like what the CBN is Beginning to do now (They should have started this several years back; better late than never though). The about N300billion Salary Stimulus Intervention Funds by PMB is similar to the Unemployment Insurance in the US. When you Pump N300billion into the hands of Salary earners you have 1.5% added to Nigeria's GDP q/q (Workers will Spend the Money Now); When you sanitize your exchange, you build confidence in both local and foreign investors and investment; When there is effective Regulatory Governmental Oversight you block leakages and ultimately provide government with the capacity to manage the process of governance. For those asking for unrestricted importation, and continued devaluation or allowing market forces determine our exchange rate. I ask; what is responsible for the massive devaluation? Demand and Supply or Speculation? It is definitely not demand and Supply; Speculation is called hot money for a reason? It is destructive and adds no value to any economy over time; it is a bubble and no serious government will and should encourage it. Speculative processes are not models that any government can build on; it is definitely Not a Buharism component.
Where has Free Trade Policies worked for Developing Economies Globally? The Biggest Problems of Developing Countries has been Globalization, Trade Liberalization (Neo-Liberal Trade Policies), Devaluation and Lack of Local Content Development. The IMF/World Bank/WTO Free Trade initiatives (Unholy Trinity according to HA-Joon Chang; ‘The Bad Samaritan’) are not working for Developing Countries...What is the Solution? Exactly the way the west grew their Economies and Societies..... Protectionism; Debilitating Import Tariffs; Local Manufacturers Subsidy and Effective Governmental Oversight. That is Buharism in few words. The Citizens must be ready for hard choices; do you operate Euro and Pounds accounts in the US? The Answer is Capital No except and probably if you are a Financial Instrument Trader, Hedge Fund Manager or a Financial Institution. Just a Little bit of History; The US Enacted a $787Billion Stimulus in 2008/2009 that was 85% tax breaks and Corporate Giveaways including Banks and Auto Bailout....Even though the POTUS had a Democratic majority in congress. Once he lost that majority in 2010; The Republicans became a major problem to the Economic directions of the POTUS; in came the Federal Reserve first under Chairman @Ben Benarke and Later Chairman @Yellen. The process and economic initiative of the POTUS was frustrated by the Republicans who wanted Barack Obama to fail and therefore enabled the Federal Reserve to take on more economic roles than ordinarily required.
So how are the Federal Reserve's (Central Bank) Monetary Policy a problem and an Issue really? The US Federal Reserve has held the American Economy up over the past decade since the Republican Pledge of OBAMA Must Fail. From Quantitative Easing; To Negative Repo to Sub Zero Interest Rates; Toxic Asset and Debt Purchasing programs and Several other policies to stabilize the American Economy. The Federal Reserve in the US has succeeded in sustaining the US economy beyond the mandatory price stabilization role. The US Economy is growing better and fastest among the Developed Economy; Unemployment is lowest in a decade; Purchasing Index is up; Business Index is up; Stock Markets are at Historically high levels; The US Dollar is holding strong..... Fast forward to Nigeria; why is Nigerian CBN's Intervention a problem? Again?.
...To Be Continued
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