Opinion article by Duke of Shomolu, Joseph Edgar
I read one very brilliant piece this morning in which the author labeled Cardoso and Edun as Ikoyi economists fighting in a fadeyi economy.
In this stupendously excellent piece, he talked about the failure of what he termed theoretical policies to address the real and very tortuous economic situation in which we find ourselves.
He honed in on the increase in interest rates, the single highest in recent history, and its failure to impact economic indices like inflation, among others.
According to this writer, an increase in interest rates is meant to reduce purchasing power, thereby leading to a drop in demand and, in effect, a reduction in prices to stimulate demand.
The writer laughed, as I am laughing now. The demand for goods and services is at an all-time low, with a marginal increase at best for goods and services whose demand remains inelastic.
So demand for food, health, and transport is at best stable, but the cost keeps rising. Demand for luxury items and other such things like building materials is very tepid and, in some cases, zero, but the prices are still rising astronomically.
The cost of baking a loaf of bread today has quadrupled by over 200%; prices have reflected, although not by the same margin as the cost increase, and demand has dropped significantly.
So we see loaves of bread everywhere, but nobody can afford to buy them, and the CBN now comes with a rise in interest rates, which will further impact the cost of producing the bread, thereby further increasing the price with still no real effective demand.
So you see why I fell in love with this writer—he got it. The theory is not working; what we have is a yepa economy driven by panic, corruption, and now a new devil, replacement costs.
Replacement cost is a brand new devil that just sneaked into the equation. As inflation is jumping, replacement costs are also jumping, leading to price increases in Malthusian proportions where we are lucky and hoarding at the worst, which also leads to further inflation.
To solve these issues, the author recommended an agbero tactic where you move very rapidly at the source of the problems, with threats of physical violence if need be.
So the idea is simple. He believes that a few people are holding us to ransom and that they are well positioned at the source, either forex, importation, distribution, access to raw materials, or banks, to mention a few.
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They are now colluding with certain government officials to ensure they keep maximising profits at the expense of the people and the economy.
So take cement, for example. It’s beginning to look like a cartel is at play. Prices are arbitrarily pegged to force demand and supply at the expense of the people.
Pricing jumping from N5, 000 a bag to where it is now in less than 9 months is damning. Now increasing interest rates or any of those IMF induced policies will not bring it down because these people control the process end to end from the ports down to the ministries in charge to distribution capacity down to even deciding who is buying or not.
These people have been replicated in various sectors of the economy. If you look very well, you will see these people, and this makes the solution very easy if we can only muster the political will to engage and dislodge.
This is where the writer says he has no solution, but this is where I differ because I have the solution.
It is now time for Bolekaja tactics. Let’s roughen it up. Let Cardoso and Edun remove their suits and ties, jump into the mud, and wrestle down these tigers.
Inflation at over 30%, with food inflation hovering above 40%, is an anomaly in an economy where 65% of economic activities are not captured by the system
What this means is that some people have put blockades on the flow. They have turned to ‘alagbara’ in strategic points of the economic flow and they must be dislodged.
I can clearly state that if they are dislodged, inflation at over 30% can be discounted by over 10% and at that point we can now start the economic theories again.
From the ports, why is custom raising the duties and generating billions into government covers—billions that are eventually stolen? Did you see the report of over N12b tied to a few customs officers?
As the monies are stolen, the effect of the duty increase is still carried by the hapless Nigerian on the street.
The tin gods at the customs must be dislodged by force and fire, the tin gods controlling distribution must be dislodged, the tin gods in government who serve as cohorts must be dislodged, transportation network must be improved; and a serious audit of big corporations must be carried out.
Trust must be forced back into the system. We have to beat trust back into banks, conglomerates, customs, and the government so that they can all join hands with the government instead of just paying lip service.
So it is no longer a job for Cardoso and Edun alone, the EFCC and other such authorities like the ICPC must join but in a very strategic way while protecting rights
Even the Stock Exchange must come under the purview of these very expansive Bolekaja tactics as we search for economic saboteurs.
Any company with a valuation of more than N1 trillion must be looked into, and if they have nothing to hide, then there is nothing to be afraid of.
We have to look at their processes, how they procure their raw materials, and how they arrive at their pricing, and also, very importantly, check the distribution process, making sure they meet international accepted norms of price fixing and flow.
You cannot now have a price margin of over 500% cos u have lost confidence in the system or that you are edging against replacement cost. Fall back on your huge reserves to even out the replacement cost till things stabilize.
Better still dilute ownership and raise more operating capital to even things out instead of throwing the rising cost to the people by unwholesome tactics so u can continue holding down a Forbes rating.
Even the ones lamenting losses due to Forex fluctuations, I have heard that for some, it’s a plot to dodge taxes, and this is sad if it is true.
Corruption must be fought with vengeance at the level of government. When I say corruption, I don’t mean catching poorly remunerated policemen at checkpoints for collecting bribes. That is not corruption; they should collect as long as it is not to turn the other eye to a crime.
By corruption, I mean all these billions we keep hearing that top government people are stealing by ‘mistake’. The smell is going even as far as the presidency itself, and nothing is being done.
In this EDU case, let’s make it a lesson. Let’s see someone in court and a lipstick in jail if found guilty. Throw fear into the system so people will sit up.
I now call on President Tinubu to go rogue to solve this problem. Let everybody come to equity with clean hands so that Nigeria can be saved.
A revived economy is the only buffer against political instability. Let’s go rogue.
Thank you
*Duke of Shomolu*
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