ENTERTAINMENT | NEWS | EDUCATION | SPORTS | MUSIC | RELATIONSHIP | EVENT | CELEBRITY GOSSIPS AND SO MUCH MORE...
The mosquito-born Zika virus may infect up to four million people, the World Health Organization said, as the agency convened to decide if the outbreak should be declared an international health emergency. Dr Margaret Chan, WHO...
Javier Mascherano has been sentenced to a year in prison but is unlikely to ever serve time in jail, after a verdict was reached in his tax evasion case. The Argentine has been fined...
The leader of the Indigenous People of Biafra, Nnamdi Kanu, has asked that the lawyer who served as his lead counsel in previous sittings, M. U. Udechukwu, step down for Chucks Muoma. Mr. Kanu...
The video of the girl being rescued has been released…The Tanzanian lady forcefully spent 8 months in that hole because the boyfriend wanted to get rich fast.It is beyond heartbreaking ..How can a man do...
The police in Lagos have arrested two undergraduates for allegedly raping a job-seeker, identified only as Nike, and robbing her of valuables in the Igando area of the state. Punch Metro learnt that the suspects, identified as Valentine and Kusimo,...
Super Eagles of Nigeria head coach Sunday Oliseh fresh from being knocked out of the African Nations Championship (CHAN) has revealed that players might reject future call ups to the squad due to their...
16year Old Girl Who was a victim of séxual abuse has made a shocking confession, saying that she cannot do without having séx with men daily. She narrated how an old man, who was...
Chris Brown posted this Photo few hours ago on his Facebook Page.. See below:- He was trying to pass a message, Thats when an Unknown Number, Start Texting you that they Miss you and...
Rita Ora posed topless on an extremely raunchy display in a sexy new shoot for Lui magazine - shot by controversial photographer Terry Richardson. ...
Telecom operators have threatened to shut down network services in seven states over closure of Base Transceiver Stations (BTS) by the state governments. Association of Licensed Telecommunications Operators of Nigeria (ALTON) Chairman, Engr. Gbenga...
The Abuja Division of the Federal High Court has fixed February 4 to hear a fresh suit lodged against the Federal Government by the convicted kingpin of the Boko Haram sect, Kabiru Umar. a.k.a....
Imagine them calling a former African president an ineffectual buffoon! In an article titled 'Crude Tactics', Economist magazine described former president Jonathan as an ineffectual buffoon. How disrespectful! The article reads in part; "In...
Rivers State government has called on the Minister for Transport and former Rivers State governor, Chibuike Amaechi, to account for about N3 trillion he received throughout his eight years tenure as the governor of...
Give me lucky generals,” Napoleon is supposed to have said, preferring them to talented ones. Muhammadu Buhari, a former general, has not had much luck when it comes to the oil price. Between 1983 and 1985 he was Nigeria’s military ruler. Just before he took over, oil prices began a lengthy collapse; the country’s export earnings fell by more than half.
The economy went into a deep recession and Mr Buhari, unable to cope, was overthrown in a coup. Now he is president again. (He won a fair election last year against a woeful opponent; The Economist endorsed him.) And once again, oil prices have slumped, from $64 a barrel on the day he was sworn in to $32 eight months later. Growth probably fell by half in 2015, from 6.3% to little more than 3% (see article).
Oil accounts for 70% of the government’s revenues and 95% of export earnings. The government deficit will widen this year to about 3.5% of GDP. The currency, the naira, is under pressure. The central bank insists on an exchange rate of 197-199 naira to the dollar. On the black market, dollars sell for 300 naira or more. Instead of letting the naira depreciate to reflect the country’s loss of purchasing power, Mr Buhari’s government is trying to keep it aloft.
The central bank has restricted the supply of dollars and banned the import of a long list of goods, from shovels and rice to toothpicks. It hopes that this will maintain reserves and stimulate domestic production. When the currency is devalued, all imports become more expensive.
But under Mr Buhari’s system the restrictions on imports are by government fiat. Factory bosses complain they cannot import raw materials such as chemicals and fret that, if this continues, they may have to shut down. Many have turned to the black market to obtain dollars, and are doubtless smuggling in some of the goods that have been banned. Nigerians have heard this tune before. Indeed, Mr Buhari tried something similar the last time he was president. Then, as now, he resisted what he called the “bitter pill” of devaluation.
When, as a result, foreign currency ran short, he rationed it and slashed imports by more than half. When Nigerians turned to the black market he sealed the country’s borders. When unemployment surged he expelled 700,000 migrants. Barking orders at markets did not work then, and it will not work now. Mr Buhari is right that devaluation will lead to inflation—as it has in other commodity exporters. But Nigeria’s policy of limiting imports and creating scarcity will be even more inflationary. A weaker currency would spur domestic production more than import bans can and, in the long run, hurt consumers less.
The country needs foreign capital to finance its deficits but, under today’s policies, it will struggle to get any. Foreign investors assume that any Nigerian asset they buy in naira now will cost less later, after the currency has devalued. So they wait. Those who fail to learn from history... Mr Buhari’s tenure has in some ways been impressive. He has restored a semblance of security to swathes of northern Nigeria that were overrun by schoolgirl-abducting jihadists. He has won some early battles against corruption. Some of his economic policies are sound, too. He has indicated that he will stop subsidising fuel and selling it at below-market prices.
This is brave, since the subsidies are popular, even though they have been a disaster (the cheap fuel was often sold abroad and petrol stations frequently ran dry). If Mr Buhari can find the courage to let fuel cost what the market says it should, why not the currency, too? You can forgive the general for being unlucky; but not for failing to learn from past mistakes.
Many of us grew up hearing the name CharlyBoy and beside that name, Lady Di. It is not by luck that the pair are still very much in the picture together and rocking it...
The letter above was purportedly sent by armed robbers to people staying at a street in Karu in Abuja. It was actually posted at the street corner. A LIB reader who lives in the...
Togolese footballer Emmanuel Adebayor joined London club Crystal Palace this week, and during his unveiling, he shockingly admitted he knows nothing about the new club despite the club being a London based Premier League...
