NIGERIA'S FOREX STRANGLEHOLD

When President Buhari came aboard last year, he was quick to declare before the world that Nigeria was broke. Unfortunately that was because he equated government inability to pay with the national economic health.
Yes, he had figures and facts that pointed to various governments inability to meet financial obligations including backlog of unpaid civil service salaries and entitlements, unpaid contactor's fees and, in the additional case of the federal government, billions in unpaid fuel subsidy.
So, naturally he thought that fixing government finances through recovery of stolen funds, blockage of leakages and shore up of non-oil revenues will do the trick.
Based on this assumption, he appointed as finance minister a lady who had a good track of non-oil revenue shore in Ogun state, made the anti corruption a rather personal one and appointed some proven ex-governors as ministers in key ministries.
Unfortunately, all that is gradually coming to zero now because he did not quite appreciate the stranglehold exercised by foreign exchange ( FOREX.)
With so many factories and assembly lines closing down over the years, forex not only kept the ones still around going through raw materials imports, but also funded ever growing consumer imports and import components of government plans and even frolics.
Yet it all flowed from oil and gas sales. So long as forex continued to flow, it made little to adjust national appetites and indeed, it made more sense to throw up economic parasites like street currency dealers, street petroleum products hustlers, an army of smugglers of all kind of products, and look the other way.
Fortunately, robust forex inflow from crude oil flow was never always guaranteed and since last year, the international crude oil market has continued to search for a bottom to rise from.
Nigeria's foreign reserve is draining fast and so, back to forex rationing days. It is more heartwarming that due to the stranglehold, blanket sale of forex has been stopped.
But then, the point still remains that some factories have waited for approved forex for so long that they will be closing down from next month if nothing was allocated to them before this month ends.
Yet to many Nigerians, and some investors it still does not make sense why forex should be rationed now. Open up the forex market and let supply and demand have the say, they urge over and over.
Sadly, do that in Nigeria of today, the bulk of the little trickling in will end up financing consumer imports, capital flight and transfer of loot to more secure foreign accounts.
In other words,all that is required today is judicious and effective allocation in order of priority determined by impact on national need that can not be done without.
This is one stranglehold you do expect to tell the IMF to go to hell and think that increasing VAT and imposing more corporate fines will fill the gap.
Nigeria just has to earn more foreign exchange fast while the crude oil price dive continues, if not loosening the stranglehold will be impossible especially with ongoing war against insurgency and impunity.