Today is Monday, which means it's a good day to remind you that Buhari and his acquiescent party, APC, were 100% responsible for the economic crisis 2016. The recession was avoidable and caused by them. Issa thread
In 2008 July, oil prices hit a high of $147/barrel. Life was good and the cash was flowing in reuters.com/article/us-mar…
Yet by December, the usual swing had happened and oil prices dropped below $40/barrel. One of the biggest falls ever seen in recent times and definitely a bigger fall than the one in 2014 theguardian.com/business/2008/…
But the high oil prices meant Nigeria entered the crash with very healthy foreign reserves. In September 2008, reserves were pinging at $63bn and dropped to $53bn by December nigerianmuse.com/20090102021223… 
So what should Soludo have done? Remember, whatever else you might say about Soludo, he was a proper economist not a roadside one. He didnt take chances - by December, he responded swiftly and devalued to N140/$1 from around N118 nigerianmuse.com/20081218035155…
Bear in mind what was going on - the 'coffers were full'. Dollar dey for reserves well. But oil prices had crashed. He could have said 'no shaking, we have reserves' and used the reserves to defend the naira till oil prices recovered. But he didnt
In fact, with the benefit of hindsight, Soludo acted too quickly because oil prices recovered by the following year. But he was not taking any chances with the economy. I repeat - he had enough reserves to avoid a devaluation if he wanted to but he took no chances
Devaluation or no devaluation, the Nigerian economy GREW by almost 7% in 2009. In other words, Soludo was proved correct - the devaluation was simply a tool to allow the economy quickly adjust to a new reality of low oil prices and continue on its path
Now this is where we test the logic of Buhari's economic logic and that of his assistant CBN Governor, Meffy - they argue that the reason that Nigeria entered the recession in 2016 was because there were no 'savings' (reserves) when this crash came. Ok, fine let's accept that
But here's the question - if the person who entered a oil price crash with $60bn in reserves still devalued IMMEDIATELY, what then is the logic of the person who claims he had no reserves to REFUSE to devalue for more than 1 year?
Reserves are to allow you defend your currency right? When you don't have reserves, what should you do? What is your best line of action given the realistic options in front of you? Buhari's actions tells us that he would have burnt all the reserves if he was in charge in 2008
Instead, the CHOICE he made was to insist on N199 even though he had no reserves to defend it. And then to start picking and choosing who 'deserved' to get forex. Dangote first. Then the rest of you eenie meenie miney mo
It is impossible to run an economy in that manner and as a result, the economy froze and everyone in the country left their real work to become forex speculators. And till today, the country is yet to recover from this act of economic vandalism.
Thanks for coming to my TED Talk
Thanks for coming to my TED Talk
