We aren’t serious
Last year, 76,000 Nigerians went to the Hajj in Mecca. So, that is a good basis for the quick math that we are about to do.
Yesterday, the CBN announced that each travelling pilgrim this year will get each USD at a concessionary rate of ₦197. In the parallel market, the only way you can really get dollars around these parts if that is possible, the naira closed yesterday at ₦400 per dollar.
So, let’s look at it like this:
76,000 pilgrims get an allocation to a maximum of $1,000 each, which means we have set aside $76,000,000 for this adventure.
If each pilgrim goes the full hog, and bring ₦197 each, Nigeria will receive ₦14.97 billion from them.
Now, if each pilgrim decides to do a “dry fast” Hajj, and keep his money, then return to Nigeria and sell the money on the blackmarket at yesterday’s exchange rate, then the combined total that they will make is ₦30.04 billion.
In other words, the Central Bank of Nigeria, has used religion, a personal matter, to potentially cost Nigeria the sum of ₦15.07 billion!
Two weeks ago, I was at an investor meeting in Washington, organised by a firm which specialises in looking for opportunities in Africa, and bringing such to the notice of American investors. The event was organised under Chatham House rules, so I can’t tell you who said what, but what is important is that all the people on the other side of the table were quite clear that they will not be investing in Nigeria until we get serious.
A chap who’s familiar with the operations of a major food company in Nigeria said, “They import 2 million tons of wheat, half a million tons of maize, and others. Bottom line is that they need 80 million USD monthly, they cannot get it.”
Another said, “A client trying to close $20 million of capital investment in the ICT sector, had the problem of getting the money into Nigeria. They couldn’t get the money in because investor refused to sign off on $20 million at official rate. It affected the company’s business.”
I could go on and on, but the summary was this — it was complaints, one after the other, and a final acceptance that our monetary, and fiscal policies, are somewhere where they ought not to be.
It matters not how many times ministers head to London, New York or Washington for investment drives, each time news like this keeps coming up, the best they will get are smiles, courteous silences, and nods. But they will not get open wallets.
This news coming out at this time, only serves as a sort of confirmation for what many investors are afraid of, that Nigeria has not, in reality, floated its currency. As long as that fear persists, as long as we keep putting religious wants over economic needs, we will keep knocking our heads against the board. And trust me, God will not come down from heaven to help us.