In the draft 2022-24 Medium Term Fiscal Framework/ Fiscal Strategy Paper for Public consultation, the Federal Ministry of Finance, Budget And National Planning and the Central Bank of Nigeria, both acting as usual like enemy-country establishments, proclaimed their intention to continue to stunt the economy and to further deepen extreme poverty in the land by keeping in place the four decades-long heterodox fiscal and monetary procedures with the attendant artificial naira exchange rates.
In 2020, Nigeria’s share of world trade was a paltry 0.33 per cent according to the World Trade Organisation. That percentage includes oil and gas exports, various categories of imported refined petroleum products, merchandise exports and imports. Contrary to widespread opinion that Nigeria is reliant on petroleum export proceeds, NBS data indicate that the economy is diversified with the oil sector contributing 8.
Two, the draft document indicates at page 18 that actual imports in 2020 soared by 184 per cent over and above the projected level while GDP declined by 1.92 per cent and industry sector slumped by 5.85 per cent. Constrained by artificial scarcity of foreign exchange, some local manufacturing firms were forced to source forex from BDCs and the black market for raw material imports. The bulk of the imported items were final goods whose substitutes could be produced locally.
Three, notwithstanding the indicated ample supply of forex in the system at any given time, the draft MTFF completes the vicious circle that nurtures the systemic economic under-performance by disclosing in its introduction that the naira exchange rate under the heterodox fiscal and monetary procedures sways to “sustained perceptions about over-valuation of the naira… CBN adjusting the official exchange rate to align with the NAFEX rate currently N410.15/$1” as it pleases.
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