Nigeria and the Challenges of Economic Reforms (Part 2)

As stated earlier, the reforms have not yielded the desired result: why? First, two years is too small to completely get the benefits of major economic reforms such as these; at least, not with the several decades of indiscipline, corruption and a clear lack of direction. Secondly, the reforms are still incomplete. There is still so much corruption in many areas of government. For instance, many analysts thought that the local refining of petroleum products would reduce the pressure on the dollar since it would eliminate the huge amount of foreign exchange spent on importation of refined petroleum products. Even though petroleum products are still imported on a limited scale, the local refining made no difference on the foreign exchange market because there are still a lot of illicit funds that are exchanged for the foreign currencies, particularly the dollar. There are so much leakages in the system that once receivers of corrupt proceeds have access to them, they convert them to foreign currencies for convenience. Sometimes ago, during the unfortunate declaration of the State of Emergency in Rivers State, a member of the House of Representatives claimed that he and his colleagues in the National Assembly received five thousand dollars each as salah gifts. Dollar is not a local currency in Nigeria: why dollarize the gift? Not too long ago, a former Minister of Finance in the country said that the government at the time observed that the value of the local currency, naira usually fell after the Federation Account Allocation Committee (FAAC) meeting. The FAAC is responsible for the allocation of federally collected revenue to states in Nigeria. For as long as there are leakages in the system, giving individuals access to illicit funds, there will continue to be pressure on the dollar and other foreign currencies. Although a lot of these illicit funds are obtainable in government, the private sector is not exempted. So, while government should sincerely carry out reforms on government processes and administration, the Economic and Financial Crimes Commission should be encouraged to build capacity and do a better job of investigating financial malfeasance wherever it could be found.
The president recently announced inland corridors with a fifty percent waiver for export of goods to other African countries, specifically targeting East and Central African countries. A very good development, you would say, but this should have been done long ago. A former president donated SUV cars to a neighboring African country, and the best he could do was to buy cars produced outside the country for that purpose. Imagine if he had purchased locally assembled cars like Innoson, GAC, etc.; one can only imagine the impact of such strategic marketing on the economy. (To be continued)