Nigeria is still in its“supposed” anti-corruption mode from a governance perspective, but the current state of the economy is not going to permit its success no matter how hard the country tries or well-meaning the leaders be. There is a highly overlooked aspect of corruption that directly results from macro-economic requirements whether it is self-determined or imposed by multilateral agencies. The devaluation of currencies particularly in developing countries exacerbates the incidence of corruption.
As part of globalisation, economic self-determination for Nigeria is non-existent. Economic determination is firmly has to dictated by multilateral agencies the IMF or Word Bank or EU etc. It is amazing that even middle-ranking civil servants in these multilateral agencies can veto or impose economic policies on democratically elected presidents, senators, representatives, governors; their cabinets and committees. Currency speculators and clubs are their real leaders. That is what is happening in Nigeria.
Whatever happened to sovereignty of a republic and democracy?
Each time the Naira is devalued in the economy, the currency becomes less valuable making it less attractive to hold. When announcements of devaluation reach the media thieving politicians often embark on foreign currency buying frenzies simply because they want to retain the value of the money they have stolen. Individuals taking money overseas or buying foreign currency to cushion or offset the losses due to devaluation is a customarily embodied practice in Nigeria; if you have the money you do it.
What thus happens is that those engage in grand and [top-end] bureaucratic corruption would see a £1 million stashed in the United Kingdom as £1 million no matter what. However, when devaluation strikes those same people will see £1 million kept in Nigeria as £920,000. The resultant inflation arising from the devaluation could reduce the buying power of the £920,000 kept in Nigeria £730,000. If this non-technical example is true, where would you expect those with the money to keep it?
How does the devaluation of Naira exacerbate corruption? It is the case that “capital flight” (i.e. the banking or investment of valuable public or private sector funds in overseas country) occurs because it is much safer for those with title to the funds. Capital flight protects stolen funds from confiscation if prosecutions do occur in Nigeria. The incentive is irresistible. It becomes even safer to do since foreign banks are entitled to bail-out largesse from their governments when they fail while Nigerian banks are not, as dictated by multilateral agencies.
Capital flight and a high consumer approach to the management of the economy ensures that Nigeria is not a nation committed to “national savings”. For sustained real economic growth, not “paper manipulated” growth, a nation has to save at least 25% of GDP annually. Nigeria is a nation expected to achieve global economic dominance without savings; that would be a true economic “miracle”. Surprisingly, hyper-rational neoliberals and their clients believe in this “miracle” with great faith.
Furthermore, the devaluation of the Naira means it becomes cheaper to buy Nigerian products and assets. Such “opportunities” then encourages Nigerian public servants especially in a new government to start stealing public funds energetically to enable them use the money, with the tactic of using a foreign-faced front, to buy privatised state assets on the cheap.
Textbooks tell us devaluing the Naira will increase exports. Nigeria is a consumer-oriented nation that depends on oil income. If Nigeria had been a “moderate” to “high” production / manufacturing nation such thinking would be appropriate. Nigeria is not even a “low” production / manufacturing nation with a growing informal sector.. Yet, Nigeria is gearing up for “world” economic power via total obedience. (see http://wp.me/p1bOKH-7Z)
It must be noted that selling at cheaper rates does not necessarily translate into greater income for Nigeria and thus economic improvements. Let us check the economic history. Unfortunately, it is Nigeria and Nigerians that get seriously devalued because socio-economically, “their way of life” is neither important nor a priority within the framework of globalisation. A country and citizens without good socioeconomic standards remain insignificant.
We are keenly waiting for President Muhammadu Buhari’s promise to make the value of the Naira to be made equivalent to the value of the US Dollar.