[dropcap]I[/dropcap] still find it funny that most people don’t know why Nigeria’s economy went into recession.
They love the incompetent lies of Lai Mohammed about the past government ruining everything. It’s also myopic to think that if Jonathan were to still be in power, we would be worse off.
The truth about Nigeria’s recession is this; it was caused by President Muhammadu Buhari’s unguided rhetoric and uncultured body language.
Firstly, there is nothing we are buying today that we weren’t buying 5 years ago, therefore, it’s not our purchase that put pressure on Naira but withdrawal of funds by foreign investors.
After the election, the president created instability with his unguided statements about how everyone is corrupt and how everyone is going to jail. The instability made foreign investors to liquidate their investment and change their money to dollars.
In the process of trying to flee, they were willing to buy dollars at any price, which lead to high exchange dollar rate. Even though some of them were not ready to run away, but want their money in dollars to save their investments from devaluation.
The president gave a bad signal by banning deposits of foreign currency into domiciliary accounts. That was
enough for free market believers to see the draconian handwriting on the wall, that was the beginning of dollar rush.
To make matters worse, the president came up with another outrageous policy of rationing dollars to certain sectors and blocking many sectors out.
That was the nail in the coffin which facilitated the emergence of free FALL.
In the end, foreign investors took over $80 billion out of the economy within a short period and everything went down to free fall.
To those who believe it would be worse if Jonathan is still there, you are all wrong. Policy continuity and political stability would not let billions of dollars leave our shores within such a short time frame.
Even though the government might have income shortage, the private sector would weather the storm by their confidence in the market.
The fear of the unknown created by President Buhari is responsible for the economic downturn not low oil price. Interest rate in America is currently at 0.5% while it is 12% in Nigeria.
JP Morgan Chase would not mind borrowing $50 billion from the US banks at 0.5% and invest it in Nigeria for return of 200%. Citibank would do the same, likewise US Bank Corp.
Morgan Chase gave Buhari warning about the repercussions of his currency fixing policy before they pulled
out of Nigeria. But his illiterate cyber warriors and mis-educated e-soldiers said, “JPMORGAN can go to hell.
Curiously, Buhari’s blinded online supporters suddenly no longer believed in economic metrics. Apparently, their messiah is now in charge of the country, so all economic laws can be suspended to make excuses for him.
Funny enough they are all suffering today because of the stupid policy but they find relief by blaming it on past administration and the “Gucci appetite” of the average middle-class Nigerian.
For the record, if President Buhari continues with his unguided rhetoric, the Naira will go further South and we may be seeing a N1,000 to $1 exchange rate soon.
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