MY THOUGHTS ON THE NEW NAIRA NOTES AND SANUSI LAMIDO SANUSI

Monetary and Fiscal policy are very important tools in the hands of the government. Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.The official goals usually include relatively stable prices and low unemployment.  Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The common sense rationale behind this thinking is that changes in the level of consumption can influence the economy.

Our Government seems to have forgotten all about this simple form of economics. In fact they seem to have forgotten that their primary aim is to serve the people. Not only is the Nigerian Government the most expensively run in the world (an Olympic Gold medal there folks), it's lawmakers are the world's highest paid and they get away with the most outrageous of things while the general populace languishes and infrastructural development is relatively non-existent.

Any economist that is worth his/her salt will tell you that they key to development in any economy/nation is TECHNOLOGICAL ADVANCEMENT. This usually comes as a direct result of qualitative education, which can lead to new innovations being discovered or "borrowed" from other sources. Of course the government has a huge role to play in making this possible first by providing such necessary education and then by creating a favorable climate for entrepreneurship and ventures. Long-term investment sectors like transportation and power generation have been historically linked to government spending and ventures and what usually differentiates developed from developing countries is their level of infrastructural development (I might add housing here to be more precise as well). 

Lately the world has witnessed the fast growth of some economies; countries like Japan, China, Dubai, South Korea, India and indeed the whole ASEAN countries have witnessed somewhat steady and unprecedented growth. Some African countries have started to join the fray now; countries like Mauritius, Nigeria, Ghana, South-Africa..... seem to be the next big thing. However, if you look at the list of the countries mentioned, what separates the men from the boys is their differing commitment to infrastructural and educational development and to a large extent - trade.

Take China VS India for instance, that one should be easy; The Chinese, even though they have a higher population burden have invested heavily in infrastructure, education and production. So the plates in your house are "Made in China". Well to make whatever it is that you have; there must be electricity to run the machines, roads or trains for the goods to be transported on and people who are trained to produce that good better/cheaper in China than elsewhere. Now let us bring that same train of thought down to Nigeria Vs say Ghana or South Africa. Which of these countries has better infrastructure, stability and educational system? Nigeria's saving grace is currently....... yes you guessed right: OIL. Take that away and we are in big trouble. What with our fantastic roads and super-fast trains, our 24/7 electricity and world class schools.

How did this happen? Nigeria used to be the place to be, Now Nigerians are going to school in Ghana, South-Africa and even the most outrageous places (where there is peace, infrastructural development and of course quality education). You have to hand it to Nigerians though, their tenacity in seeking for knowledge and education is unmatched, but how can a nation so blessed with such human and natural talent be so backward? The reason is clear; leadership (I say it's leadership is the world's greediest and most corrupt if you ask me). We have allowed things like religion and ethnicity to blind us and make us follow the wrong people. But really that is not the crux of this write-up (as you can see form the title).

Last week, the Central Bank of Nigeria announced that it would introduce a new N5,000 currency note and coin the N 20, N 10 and N 5 notes to be used as legal tender along with the existing coins of 50k, N 1 and N 2. Any economist will also tell you that the printing of higher currency notes is a sure sign of inflation (because now, you need more money to buy the same stuff) and this is also linked to higher unemployment rates (Nigeria's current unemployment rate is a scandalous 24% - yet our government is the world's most expensive). 

I remember in 2007 Ghana did the direct opposite, they re-dominated the cedi to be  worth 10,000 second cedis; because of this change, Ghana's currency became one of the highest-valued currency units from one of the least valued currency units. i.e.they used to have very big notes and they made them smaller. What happened to their inflation and unemployment rates? Although to be fair they have also invested heavily in infrastructure, education and good governance.

How about our good friends the Zimbabweans; At independence in 1980, the Zimbabwe dollar became the common currency. Originally, the paper notes were Z$20, 10, 5, and 2, and the coins were Z$1, and 50, 20, 10, 5, and 1 cents. As larger bills were needed to pay for menial amounts, the Central Bank of Zimbabwe planned to print and circulate denominations of up to Z$10, 20, 50, and 100 trillion. Announcements of new denominations were increasingly frequent; the Z$200,000,000 bill was announced just days after the printing of the Z$100,000,000 bill. Needless to say Zimbabwe witnessed massive hyper-inflation.

When "Bigger" notes are printed, there is the temptation for businesses to push up their prices. In today's world; who really is printing bigger notes? What with the advent of debit and credit cards? Last I heard we were moving towards a "cashless society"? Where is this coming from, ohhh I know sorry: Thieves are planning to steal again. Think of it; who will this new currency note benefit? You? Your business? What a joke? No, if our leaders were concerned about you or your business then they would improve the infrastructure and  move towards a cashless society to facilitate easier business transactions. There is only one set of people this new currency note will benefit and that is clear: our thieving leaders especially early  before the next elections.

What baffles me the most is the silence of our so-called economists. As an economist myself, I wonder what is wrong with Nigerian intellectuals, are we so scared for our lives that we cannot speak the truth anymore? (I know some people will say; nah because you dey abroad) or are we so plain lazy that we cannot research to find out the effects of government policy on the very people our science calls us to protect? Why is Sanusi doing this? What is his agenda? I will not use this forum to talk about his other outrageous and ill thought of schemes. I wonder where exactly he studied and why he is doing this? Has he forgotten that he is to "serve" the people and not some godfathers or puppet masters? What is this?

As Nigerians, our focus must be clear, we must say no to corruption and bad governance; those two things are synonymous with poverty anywhere in the world. We must embrace integrity, honesty, hard-work and education. We need to elect leaders who have vision and are credible or else; we will all suffer. Fela was right; we must not be afraid to question authority when we see them doing wrong.  We absolutely cannot compromise on things like educational and infrastructural growth. We MUST have good roads, trains, houses, electricity and pipe-borne water in the 21st century. That should be our focus now. Not some funny looking Naira notes or religious or ethnic issues. We need to slash the salaries and entitlements of all our so-called political leaders and channel those funds into more productive ventures. God bless Nigeria and you.

P.S we will not be bribed; Sanusi cannot try to buy the sympathy of women by saying the new note will have women on it (He knew we would not listen to the previous one of having the late Yar Adua on it - Rest In Peace). If he is so concerned about the plight of women, he should tell the government to invest more in female education and he can print existing currency notes with the faces of women on them to join the notes in circulation; like they have in other countries.