In the last 4 years, Nigeria has been in a recession. The citizens have been at the harsh receiving-end of a mismanaged economy – an economy run by amateurs and overseen by a dictator who has no insight whatsoever as to how to run a business not to talk of a nation as big as Nigeria.
And while Nigerians are trying their best to make ends meet, the UK is about to pass a ruling that would suck the life out of the economy, in the tune of $9bn of Nigeria’s federal reserve.
The court ruling by the UK is granting a small natural gas firm, the right to lay claim to $9billion of Nigeria’s assets in her foreign reserve. The gas firm is suing Nigeria because of an aborted gas project/contract which it had in Calabar, the South-Eastern part of Nigeria.
This is outrageous, and if it were to be let to happen, the fallouts on the economy would be disastrous.
If this judgement goes through, this will be the largest financial liability that would be placed on the neck on Nigeria since its amalgamation.
In a statement, Godwin Emefiele, the Central Bank Governor, reacted to the shocking news, saying that Nigeria still had the opportunity to appeal the court ruling by the UK. The company which the ruling was carried out in favor of is called Process and Industrial Developments Ltd.
Emefielie, reassuring Nigerians, told journalists in Abuja that “We know that the implication of that judgment has some impact on monetary policy… That is why the central bank is going to step forward and … defend the reserves.”
From his statements, it was gathered that he did give specifics on the entire measures, or say countermeasures, which the Central Bank of Nigeria (CBN) had in place to shield the country’s foreign exchange reserves from being sliced by the court ruling.
In an international reaction to the news, Cobus de Hart, a senior economist at South Africa’s NKC African, Economics, said that:
“FX (foreign exchange) pressures have intensified…the UK judgment could add further fuel to the fire… Worryingly, the central bank is employing unconventional tools more regularly to try and keep the naira stable and safeguard reserves…” He suggested that the ongoing risk will most likely result in “slower growth and higher inflation”.
As Nigerians ease into the realities of this news, it is unfortunate that the Nigerian economy is yet to recover fully. In the final weeks of August, the Naira was said to have weakened from N363.50 per Dollar to N364 per dollar, as liquidity dried up on the foreign exchange market.
In times like this, Nigerians would wish for the economic sagacity and professionalism of Okonjo Iweala, who worked and served under the Goodluck Jonathan administration, taking Nigeria’s economy to a greater height.
The pressure and responsibility fall on the government of the day, to revive the economy, and make a strong appeal, in an attempt to save Nigeria from losing that substantial amount of its foreign reserve.