Exchange Rate: Dr Ifeanyi Ubah and Possibilities
I’m now gonna give my opinion on whether Dr Ifeanyi Ubah had a hand in the reported appreciation of the naira (or better, if a bold statement from him or another billionaire could influence exchange rate).
Caveat: I am an engineer, not an economist. My all in economics is as course in my first (and still only) module at Harvard Business School.
Now let’s go:
Macroeconomics, the economics of big issues like inflation,unemployment, productivity, export,etc is governed by three items — Output, Money and Expectation.
Output has to do with national production –tonnes of cocoa, barrels of oil, duration of service produced in a nation within a period. It is measurable. It’s tangible. It’s real.
Money has to do with government spending, bank rates, CBN affairs including exchange rates, etc. It is also measurable. It’s tangible. It’s real.
Expectation is amorphous. It is not measurable. It’s not tangible. It’s not real. It’s even poorly grasped. Nobody can claim how and where it exactly originates. Some economists go over to call it spiritual. Some psychological. Some, believe it, demonic. But it exists and 15% of economic crisis of nations are blamed on it.
The Great Depression America experienced between 1929–1933 is traced to it.
Someone says something unfortunate or fortunate about the economy. Another picks it up. Then another gives it their twist. And on and on…And the nation can be on a bandwagon.
That’s why John Keynes, the most respected economist of the 20th Century, who studied it well and whose Keynesin theories were adopted by the Obama Team to save the US economy in its second major Depression in a century had called it ‘animalistic instinct.’
Can Dr Ubah’s TV talk affect the exchange rate? Absolutely. This appears too truth, unless you have a personal hatred of him, if actually, as reported, the naira rose after his assertion and without any reported CBN or government’s initiative or action in the 24-hour window after the claim.
Expectation, animalistic instinct, herd-mentality, speculation,however you choose, is a reason some of us, I here on Facebook, have insisted that Kemi Adeosun, Udo Udoma and Godwin Emefiele should be confident enough to tell convincing lies or speak faith, if we must not be so explicit. It’s all in the strategy to go forward. Do you think every story Charles Soludo or Sanusi Lamido was dropping was lifted off the Holy Bible or Qu’ran. Those cowboys understand economics.
Instead of arguing about the remittances with WAEC, something EFCC is required by law to handle, or why her staff must be sponsored by Chinese on trips, if Kemi had dared on national TV soon after the reported discovery of $1m in a Lagos latrine, ‘We are gonna break open all newly-built tombs in Bayelsa, all vaults in Asokoro and Maitama, all sewage in VI,Ikoyi and Ikeja,’ the naira would very likely have shot North.
There are dollars hidden in houses, shrines, everywhere the criminal mind can conjure. Invent measures to frighten or unsettle the hoaders and the naira may be saved.
That’s what Dr Ifeanyi Ubah,who should know about these hidden dollars, just did.