The exchange rate began to fall immediately ifeanyi Ubah spoke on Channels. Thereafter Ubah thanked anonymous people we don’t know for responding to him. People have given it multiple interpretations. Some think it’s Ifeanyi Ubah’s body language, some think it’s Ubah trying to beg his way back after his TAN efforts for jonathan, some think it’s self promotion. I think it’s the first salvo, in a response to an ethnic forex battle, unleashed by Buhari.
Yes, it could be part of Ubah’s consultancy marketing for forex, pitched to the Govt; or a remarkable case of self-promotion. However, Ubah does not talk for talking sake.
Round tripping in Nigeria was invented during Buhari’s rule in 1984. A black market then emerged for the first time. Before then you could take your Naira to Heathrow and change at Heathrow. I was a student in the UK then.
When Buhari changed the Naira, billions were lost to forex traders outside Nigeria. Financial markets have a long memory. They record everything. They remember what Buhari did to them in 1984.
Buhari then introduced all these applications through CBN. This difference between Central Bank and Black market rate appeared. People made a killing on it. That was how I sponsored ny studies in UK, round tripping my school fees and living expenses. I was always in Nigeria hassling the Alhajis that will get us CBN Approval, as it rapidly fell under the control of the Hausa Fulani. They then deliberately perpetuated this policy that ruined our economy, until Obasanjo and Soludo burst it in the interest of Nigeria.
Since 1984, Forex in Nigeria was never about Market forces until Soludo came. When Soludo liberalised it and CBN shadowed the market rather than dictating it’s own exchange rate, true market forces appeared and for the first time I could buy forex from Igbo people in Enugu.
The Hausa Fulani had come to see Forex as their business. They were furious when Soludo liberalised it. The first action they took when Yaradua came to power was to boot out Soludo for ruining their business. And they introduced Sanusi to GEJ. I am now coming to realise GEJ was in the South South a good part of his life and never really interacted with Northerners. He proved to be very naive about how they think. That’s why he thought Almajiri schools, universities and roads would appease the North.
Northerners do not think competition like Igbos. They will seek total control wherever they can and impose things by force or dictat to further their objectives.
What Buhari practises is not dictated by normal economics but by Buharinomics. Once you understand it, nothing he does appears so stupid anymore.
Buharinomics is not what is in the best interest of Nigerian economy. It is driven by four things:
1. Arab Muslim expansionism.
2. Northern Muslim macro economic interest for the region and
3. Northern Muslim micro economic interest. That is individual benefits.
4. The perpetual threat of and willingness to use force and intimidation, which other regions try to avoid, forcing them to give up their resources to avoid violence.
It is in this light that you can best understand the huge gap between CBN policy and the black market. Emefiele knows what to do but can’t do it. He has been set up as a fall guy and will jeopardise a lot if he dares resign. His other option is to keep quiet and join the forex band wagon.
The right thing by classical economics is for Buhari to reassure the people and the international community with nice words and a firm economic policy, borrow money against future oil proceeds to radically diversify the economy. That means CBN will shadow the black market rate, dollar movement in and out will be totally free. This is a time for people living abroad to make a killing acquiring land and property at rock bottom prices. This can be aggressively pursued by Govt to bring in inflows. That is classical economics.
However this is what Buharinomics is doing: demarketing the country causing Western investors to flee, seeking Arabic dollars to force us to be Arabic focused and allowing the huge gap in the forex market to flourish to make a killing for their people and region.
Why is Buhari fixated on this fixed Naira-dollar rate rather than shadowing the forex rate. Simple. It’s Buharinomics. Remember he gave pilgrims the dollar at 160 when he first came in. That was to reward his brothers with round tripping to make a little nest egg. Who are those benefitting from the fixed rates. The highest beneficiary is Dangote. Hausa Fulani and some South West based industries are the true beneficiaries. South East traders are being decimated and their businesses wasted. This fits nicely with Buharinomics.
So what is driving high dollar rate. The answer is also simple: BUHARI!! Immediately he came to power, the financial markets remembered 1984 and panicked. The first to pull out to warn the rest of the world was JP Morgan. A mad rush followed. JP Morgan was right. They were lucky they moved first. Immediately after, Buhari went into 1984 mode and locked down the dollar for him and his people – Buharinomics. Very very easy to predict once you understand.
They are so possessive and blind that they want all dollars in their control. Until recently any dollar you put in the bank ends up with them, until after the coming of the IMF President, when they were forced to relax dollar in and out flows.
All these means that until Buhari goes, forget Western investors or Western loans and expect only Arab handouts. Imagine a blind man leading a blind man. We all know the parlous state of Arabic countries. But that Is Islamic heaven to our Northern brothers, so now Arabs will determine our levels – including Boko and Fulani herdsmen.
So classical economic analysis of supply and demand is only partially true and rests on the wider sentiments of people desperate to get their money out of Nigeria. But the real determinants are political and tribal. In order words it is not really economics in operation.
What is happening to the Naira is like what happens to a bank potentially in distress. People rush to get their money and the bank enters real distress and clamps down to save itself. A competitors can shut down another bank by successfully planting rumours.
Forex today has become a huge racketeering and roundtripping bonanza – just like it started in 1984 – despite all the noise about fighting corruption. Everyone in a good position such as bank officials cash in. It is now big business to have the access to help people get dollars. The Alhajis are back in business with archaic Hausa Fulani arrangee deals of the 1980s and 1990s.
Who is losing here? Igbo traders. Who are the biggest Igbo losers? Nnewi traders. That is why Ifeanyi Ubah has come forward. His people are in deep trouble. Ibeto cement has been stopped. Innoson cars are no longer official Federal cars. Igbo is hurting.
Ifeanyi Ubah is a clever businessman. He knows Igbo have to survive. Nnewi has to survive. Igbos have billions worldwide. They dominate many African markets. They are the mist populous Africans in America. Ubah did not just talk on channels. He reached out to his brothers to save the Igbo man and Igbo trade. Like he flooded the land with petrol to break the fuel strangle hold, Igbo dollars are hitting the market to save their brothers.
There is a tape going round released through Donald Ekpo about the APC – Hausa Fulani/Yoruba plan to destroy South East and South South and use their resources to build the North and West. Igbo markets are bull dozed and burnt. That tape seems to be very REAL!! But let’s not generalise. Anything up to half of the Yoruba people are not part of this ethnic palaver. I am not as sure for Muslim Northerners. Most seem to be Buhari zombies.
This taoe predicted the attack on Igbo trade. The Forex Market is part of that attack. Whilst Igbo traders buy dollar at $1 to 400, Yoruba and Hausa Fulani businesses will get it at $1 to 200. So instead of Igbos dominating market by price they will be forced to sell at much higher prices and cannot compete.
So what Ubah did is not just body language. Real action is taking place.
Money is fleeing Nigeria out of fear. Their is panicky search for dollars as people want to get out at all costs. Ubah may have offered to help so as to ingratiate himself to Buhari, but they already had their plan in place. However, like a lot of Igbos he misunderstands the Hausa Fulani mindset. I will be surprised if Buhari is unlikely to accept the offer for obvious reasons. Further the offer is a threat to the forex racketeering going on.
Without waiting for Buhari to agree, Ubah and his brothers have begun the Igbo fight back for survival in Nigeria. That is why he can’t talk about his secret, of how he would do it, publicly. Like he released petrol to fight the petrol cabal, they are flooding dollars to Igbo traders and causing the traditional Hausa Fulani forex to crash.
It is only at this point that we can talk of market forces. Hausa Fulani forex are losing heavily from this, as dollar is now being sold way below what they bought. In trying to hurt the Igbo man, Buhari has hurt his people.
How far can they sustain this forex battle? One good thing though? The Igbo now have new ways of sourcing their own forex.
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