Vanguard (Lagos)

21 December 2012

Nigeria: Not Prayer Alone But...

Even if one is not a religious fanatic, one is bound to be captivated by the simplicity of President Goodluck Ebele Jonathan at the recent Annual Convention of the Redeemed Christian Church of God (RCCG). At the Redemption Camp (Lagos/Ibadan Expressway), the President was reported to have asked Nigerians to continue in their prayers for the country and his administration, asking also for the advice of people at anytime he is making mistakes.

The President returned to the Camp where he sought for God's direction two years before. The Presidential Election was won and like King Solomon, in the Christian Bible, the President has returned to seek for wisdom.

I am always impressed, as many people would, by the action of many people in high places bringing themselves low to seek prayers and advice of people in the conduct of their affairs. I agree fully with the Psalmist when he said, "Oh thou that hearest prayer, unto Thee shall all flesh come". (Psalm 65:2). President Jonathan was reported to have said, "I request that you continue to pray for our country.

As a Nigerian, I will like to complement the President's call to prayer with another biblical quotation which reads, "watch ye therefore, and pray always that ye may be accounted worthy to escape all these things that shall come to pass and to stand before the Son of man" (Luke 21:36).

The collonary to the President's call for prayer is an adage which says, Pray and Work. Since the President has solicited for advice when his government is going the wrong way, one could answer with justification that many good advices have been given in the past which have been ignored, and that the reports of many committees have been submitted without any action.

However President Jonathan, perhaps out of repentance would prefer new prayers and new advices, it is easy to re-package old ones in new colors. Though the President has been described as a listening leader, many may not be sure about the quality of his advisers or the substances of the advices given to him.

It would be 100 years in 2014 when the Northern and Southern Provinces were amalgamated into what is now known as Nigeria by the British Official, Lord Lugard. The prayer is that Nigeria should still exist as a strong and united nation under the leadership of President Goodluck Ebele Jonathan.

This prayer assumes that Boko Haram insurgency would have ended, that corruption should have been seriously tackled if not totally exterminated, that inflation would have been properly managed and unemployment reduced to a minimum. The pre 1914 era could be imagined as an era free of agony and distress of today.

If it is true there is a secret clause that enjoins Nigeria to examine its position after 100 years, the time now is ripe for all Nigerians to reflect on the activities of the last 100 years and what would follow next. What all Nigerians would expect and work for is that the year 2014 should not find the country disjointed and in deep poverty. The great job I think President Jonathan has before him is to arrange for Nigerians to sit down peacefully and discuss meaningfully on how to live in a peaceful and prosperous country. It is a job that needs prayer and hardwork.

INFLATION

As I have noted before in this column, inflation like corruption has become an endemic disease in the country. Inflation is a process of rise in prices. The inflationary process can come about as a result of change in demand or supply conditions or both. However, the essential feature is that effective demand exceeds output at the current price. This is likely to occur once the zone of full employment is reached (3% unemployment or less in developed economies), but no exact percentage can be given at the point where inflationary process may commence.

The fear of the growth of inflation, a situation where money is becoming useless as a means of exchange or store or value has been the problem of the Central Bank under the present Governor, Mallam Sanusi Lamido Sanusi. Since his assumption of office, the Central Bank has changed the Monetary Policy Rate (MPR) six times to the present rate of 12%. These changes have affected the Deposit Bank's lending rate upwards to over 20%.

It looks as if the Central Bank has been able to persuade the Government as to its suitability of tight monetary policy as the most effective cure of inflation. It is a surprise that the Federal Government with its array of brilliant economists under the Finance Minister and the Coordinator for the economy, Dr Mrs Ngozi Okonjo-Iweala will be taken for a ride by believing that inflation is a monetary phenomenon that will be wished away by the romance of a conservative monetary policy.

In its simplest form, tight monetary policy would only appeal (with its implication of high interest rate) to those who have idle money to lend and by those large organizations on which the direct effect of such tight monetary policy is minimal. The victims of high lending rates are small scale enterprises, local governments, private school entrepreneurs, and similar local organizations which rely on borrowed funds.

As experiences in the economically developed countries had shown, and Nigeria's recent happenings have indicated that there is no romantic magic by which an economy could be rightly guided and wisely directed by the Central Bank. Thus, the heavy reliance on the Central Bank (with its tight monetary policy) for combating effectively inflationary pressures should be discarded.

The earlier this is done, the better off the economy would be. It should be emphasized again, and again, that when there is mass unemployment and considerable idle capacity (as they exist in Nigeria today) through CBN's tight monetary policy, an excess of government's expenditure over receipts (taxes etc) is the most acceptable and reliable way of expanding economic activities.

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