Nigeria: Famine & Falling Currency

Its really an unprecedented series of geopolitical and domestic challenges for AFRICOM, the U.S. senior combatant commanders charged with monitoring and shaping indigenous counter-terror reform throughout Africa.  Although housed in Stuttgart Germany, they currently reside throughout littoral West Africa striding both sides of the equator.  Its a thankless task, but only the indispensable county can muster resources sustaining favorable traction against both the Islamic State and famine.

Northeastern Nigeria is currently suffering from famine.  This is chiefly a man-made problem brought about by Boko Haram.  Nigerian farmers throughout their interior have abandoned farming to the wiles of a Saudi proxy.  This will eventually hit Lagos and numerous other cites southwest of the Nigerian interior.  Already there are terrible signs of a dangerously flailing economy evidenced in wild currency fluctuations.  Beginning on June 20th, Central Bank authorities unpegged the naira to the dollar, only to watch a 30% plunge making Nigeria’s currency the worst performing currency regime of the entire African continent.  Only Venezuela and Suriname surpass Nigeria’s fallen naira.

To be fair, the attempt by Nigeria’s central bank to float its currency lasted only a day, it now flatlines against the U.S. dollar managing a 282 parity rate.  Why is this odd? Its strangeness stems from Godwin Emefiele’s attempted restriction of the money supply in a bid to maintain parity at 199.  Stability has only very recently emerged, but only after the central bank sold dollars and moved toward a managed peg.  What explains the gyrations from peg, to float, to managed peg?  The answer is found by witnessing the political intervention Nigeria’s new president hoisted upon central bank leadership.  President Muhammad Buhari has always feared a weak currency, but he acknowledged fleeing investors and dropping FDI to acquiesce toward a currency regime of a managed peg. Financing Nigeria’s ever widening trade deficit is commanding all the resources of governing leadership.  They’re not out of this yet. . .

Currently, Nigerian political leadership is learning on the job, something the America regime and media cohorts brilliantly obscure.  This intervention has created massive distortions evidenced in food, product shortages, bringing factories to a standstill.  As of this writing, Lagos has an economic contraction of 0.4% and stabilizing, however, massive unemployment and inflation raging at 16.5% means this man-made policy disaster will grow unless leadership redresses monetary mismanagement.

How else to say it:  liberalism works here, but anywhere else, it immediately fails.

Yes, institutions matter.  But so does sound governance.


About William Holland

Systematic Theologian/International Relations
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