Blogpost

This is your visit to this webpage.


Follow the Launch of The
2024 Macro Economic Outlook
Learn More


Posted Mon, Feb 5, 2024 8:53 AM

The Cultural Roots of a Currency Crisis

The three piece suit and tie is my pet peeve. Incredibly swanky, undeniably formal, exuding power and promising knowledge, the fully attired banker in four layers of clothing on a hot Monday morning in Lagos is a museum piece. Nothing about this gentleman belongs in a 30 degree extreme humidity city with the air quality of Bombay.

I have been told some ladies find men in the formal western attire with the funny rope hanging around the neck attractive so I will pick my words carefully. Having been conditioned by decades of perceiving power and knowledge in the form of a suited European gentleman, it was only natural our newly formed elite inherit civilization in a sweaty package, the 3-piece. And successful men it seemed, all wore suits. It evidenced education, a profession, elitism.

But I never ceased to imagine the damning transfer of jobs that each pair of suit represents, each mindless tie purchased, each impressive pair of Italian shoes to match. Tens, maybe hundreds of thousand of people mimicking their erstwhile oppressors in every possible way, attributing civilization to a foreign way. The millions of ties, suits and shirts purchased over the decades represents jobs that could have been done by our people but we outsourced by choice. Some will say for a good reason, others will even argue the amount is insignificant.

Except that it isn’t, and the experience with suit has replicated itself in so many aspect of our lives to a point that we can no longer worship without importing ointments, we cannot build without Italian marbles, we bury our dead with caskets from abroad and when we pour libation to our ancestors, the spirits is rarely of our land.

Let’s delve into the economics of this way of being, of wasting scarce foreign exchange on things we do not need to import, of failing to produce the things we could, of continuing to mimic a culture that requires us to remain economically teetered to others at the cost of the unemployment of our people.

But first, let me say this — I am no stranger to foreign exchange and trade theories, I hold a degree in economics and my dissertation( MONETARY THEORY AND MACROECONOMIC MANAGEMENT IN NIGERIA, available on academia) which was published in 1995, delves into some of the financial markets issues bedeviling us today. But this is not an academic treatise, this is my reflections at the cross roads of culture and productivity, and how the personal choices we make define the society that evolves around us. I believe that it will eventually explain everything from inflation to crime, from unemployment to extreme poverty. But it is more art than science at this point, more anecdotes than technical data.
 

Let’s throw some numbers around, see where it lands. There are just under 100,000 financial services professionals in Nigeria today, up from about 50,000 20 years ago. While not everyone of them can afford Hugo Boss, I have put an estimate for their annual spend on the infamous 3-piece and other western fashion accessories at $500 ( averages can be helpful). Thats a possible $50m ( N60b ) in value that could have been partially domesticated. And if you think my estimates are high for our expenditure on foreign fashion, consider that it’s not only bankers, we have all kinds of professions and wedding processions, children decked out in discomforting outfits, ladies in designer lingeries. Imagine this avoidable expenditure cumulated over the decades, the repeated self harm.

I can understand the argument for a man to wear his 3-piece in peace, it’s a free world after all. What about the relentless import of cheap Chinese gift items or award plaques that adds zero economic value to our country? Why can’t the awards and gifts be locally handcrafted, thereby producing unique and authentic artifacts that holds value instead of those generic bland glass moulds that every award ceremony hands out? Why can’t we be intentional about putting our people to work, using sustainable materials, creating respectable jobs, in small and big ways?

The stories of importing things we don’t need at the expenses of investing in our economy is one we are all too familiar with, and you can probably list a dozen items on that menu you wish we didn’t import because we don’t really need them. Like those expensive super cars that merely grace our garages, or the rusty zinc roof that replaced our traditional architecture, or the harmful asbestos that was once a measure of men.
 

But let’s talk about the cultural dimension to our continued self harm in the name of being cultured, exposed or well travelled. My story goes back to December 2020, when, in the middle of COVID, a friend invited me on a road trip to chart a new tourist experience themed the pounded yam trail. To cut a long story short, the adventure saw us traveling through the towns most famous for pounded yam in the South West. We visited Ondo, Ekiti, Osun and Ogun states, with memorable stops in Imesi Ile, Arinta falls, Ado Ekiti and the ancient Ondo town, where we had a memorable lunch for 3 at a cost of two thousand Naira, followed by dinner by a campfire. It remains one of my most memorable vacation and in my telling of it, is beginning to assume an epic dimension. Nigeria is full of unrealized potentials because we are stubbornly focused on what is out there rather than what is in here, consistently dissipating valuable oil resources all over the world but very little interest in experiences that can creat jobs for our people and a tourist destination for the rest of the world.

At this point, I expect someone to bring up insecurity, a fair point. Except that we are suffering the consequences of abandoning our communities, our insecurity today is the outcome of our underinvestment in our people, not the reason for it. Contest this if it pleases you, but take time to chart a map of Nigeria, the violence perfectly mirrors the poverty.
 

There’s an entire economy of the consumption choices we make, from fine wine to destination weddings, that feed the hunger of our people. We don’t connect the dots because it is our right to spend our resources as we please, but it comes at a cost, both social and economic. It doesn’t matter that you are extremely hardworking and well educated, that your parents sacrificed so you can succeed, the baseline is unless the rest of the society is gainfully employed, you don’t have the podium to toot your progress, the wealthy in a failed society are often seen as bandits by the poor, and deemed legitimate target of violence.

Speaking out is easy for me because I am as guilty as the next guy, I struggle everyday to domesticate my taste, to localize my consumption, to invest in our people even when my business sense tells me I can get more elsewhere. But I stumble everyday because I also appreciate the quality we don’t yet have, the education from traveling, and I desire the finer things too. I now proudly wear cloths that are finely tailored by our own, at a fraction of my Italian store budgets ( even though I was never one of those to invest in an expensive wardrobe), I have a preference for local food, and ‘summer’ is not a thing in my household.

The unfortunate thing about these choices is that it will eventually be made for us under very different and much more difficult circumstances if we don’t make them ourselves. Those who are old enough to remember austerity measures and the rationing of essential commodities might have forgotten how painful it was, and how our years of living large in the seventies and eighties got us there.
 

We often blame government for its excesses, for its corruption, for its failure to plan, for ignoring all the signs. And we should. But our government is of us, a man who must have his French wine even as many lack access to clean water, will purchase Italian furniture for his office when he becomes a minister, he will insist on expensive SUVs where a much cheaper vehicle would do. He is a man with a culture of excess, a questionable sense of success in the midst of squalor. And so the change must begin at home, with us. Or not at all.

The next time you see a spike in the exchange rate published by abokifx, remember that it captures the impact of easy money by the government via ways and means, it represents the consequences of the decay in our oil and gas industry, leading to historically low output, it encompasses the corruption in our government as evidenced by our transparency ranking, it summarizes the result of our wastages and the years of neglect of critical industries like petrochemical and steel.

But it also captures the economic consequences of our adopted western life, one that subtly suggests our food are for the poor, our clothes for the unenlightened and our destinations are budget. If we want a different type of country, one in which our people are put to work making the things we need and exporting the excess, we must first begin by appreciating the things we have and the crafts we are good at. We must delegitimize the mindset that foreign is always better, and insist that what we have at the start is good enough for a start.

Only by doing this can we avert the impending social strife arising from millions of young people with nothing to do because their jobs have been exported by the choices we make.
 

It is not that we cannot afford to live like this for a while, we clearly can. But can we afford to live in the society that is left behind?

Final note: if you are triggered by this, your wristwatch is worth three times the annual minimum wage. And 9 out the 10 things nearest to you right now is imported. Thats why it hurts.

Abubakar Suleiman, 30 January 2024.

Find a blog post