When the Almighty (As of that time) British Pound Sterling was devalued in 1967, the British Prime Minister of the time, James Harold Wilson founding himself in a political tight corner famously said that inspite of the devaluation.
“The Pound in your pocket is still the pound.” This was pure sophistry worthy of an astute political operator. It was intellectually dishonest, for a devaluation is in effect a punitive task on the purchasing parity of in particular the least protected social sectors. In the case of Britain to ameliorate the punishing effect that accompanied the devaluation they simply went for bust on export in other for the pound to regain its value, Wilson quoted Indias independence Prime Minister Pandit Nehru to with “Either export now or reperish”.
In the case of Nigeria and the Data is irrefutable the devaluation was not accompanied by an export drive. In the case of Nigeria, the acclaim poverty capital of The world know immediate let alone short term social safety nets were constructed to act as a shock absorber.
No amount of spin can disguise a glearing fact- Nigerians have never had it so punishing!. If you seek to appreciate the punitive nature of the devaluation, just look around you. No amount of spin and the creation of alternative reality can mask the rise in malnutrition, the upward trend in pupils in withdrawn from school because of not only the school fees but also the cost of transporting them to school and back. There are virtually, no more school busses in the state. This is hedious! We now have the gory site of school children skipping bus stops in order to be able to get to school and back. The retention capacity as a result must be very low and is reflected in school test results.
The reality in the markets and in the farms is stark. The devaluation has recked purchasing power. Because of the inadequacy in storing facilities, farmers and traders are face with glaring loses. What ought to have been done if there had been a cohesive ameliorating counter attack is that the shipping containers which later the landscape should have been converted under a government private sector partnership into solar paneled cold storage facilities. This will have unleashed a green economy created thousands of new jobs and rebuilt technical capacity. This should be done now.
The devaluation is punitive as anyone paying rents, school fees and bearing transportation costs will testify. The painful lesson here is that a devaluation of a national currency, particularly in countries with virtually no safety nets should have done virtually in luck step with the building up of social safety nets. A good example here is comes from Chile. When the Latin American country embarked on the phasing-out of “subsidies”. It was done over eight years during which an export drive was triggered off and Social safety nets constructed and reinforced. The example of Chile is more than what a look.
What we have now is a catanistc situation. This is reflected for example in the very low voter turn which accompanied the by-elections on Saturday. In a country such as Germany where constitutional there are minimal voter turn out in a country such as German where constitutionally you have to achieve a minimal voter turn out threshold election will not have been satified and you will would have had to start all over again at horrendous costs to the treasury.
The electorate is also in what sociologist call a State of Anomie which implies a complete lost of interest. This cannot be good for the stability of any democracy let alone one that is still fragile. The fragility is reflected in the violence which occurred in many constituencies.
The time has come in view of the social consequences to reappraise the effect on living standards and as well as the erosion of social stability caused by the blind pursue of the discredited descriptions of the Bretton Woods institutions. The government should return to the commitment with which it would the electorate in its 2023 manifesto where a commitment was made for the construction of a “Social Market” economy. A social market economy is based on the pursuit of macroeconomic stability as way of achieving social justice. This constituted the backbone of the thought of titanic figure such as Chief Obafemi Awolowo, Dr. Micheal Opara, Lateef Jakande, Sam Mbakwe, Abubakar Rimi, Balarabe Musa and Co. To get out of this awful predicament, we must now go back to an economic system based on lessening the economic disparities as well as ensuring an indeed deepening the tenets of our democracy.
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