This paper shall discuss the following:

1. What are the basic functions of a currency in a modern economy?
2. What impacts do their exchange rates have on development, economic growth, and living standard?
3. Do developing countries have an option other than allowing their currencies to float?
4. Is the present world economic order a fair arrangement for developing countries?
5. Is introducing a new currency or re-inventing the Naira an option?
6. Why unbalanced economic strategy and Concentrating our Resources are important strategies for sustainable Economic Development
7. Summary

What are the basic functions of a currency in a modern economy?

Before long, let’s look at the three basic functions of a currency and ask if the Naira still satisfactorily fulfils those functions. The currency of a nation would normally serve as
1) a medium of exchange,
2) a standard of value, (accounting unit) and
3) a store of value

A closer look at these functions would show that in a complex economy, money is usually the only accepted medium through which a buyer pays a seller. Without money as a medium of exchange, most economic transactions would virtually be impossible. The second function, a “standard of value” or „accounting unit”, gives a common unit by which to measure the various kinds of assets of a business and human endeavours. By assigning monetary value to such assets as property, production machines, production factors, etc, we can compare the values of different assets when buying and selling them. The currency of a nation also functions as a store of value. Money is a convenient way to store wealth for use whenever it is needed. In advanced economies, money can be held as part of one’s wealth in a bank account or a “piggy bank." If however, the value of a currency is not stable, the value of that wealth will diminish daily. The ability of a currency to store value is a prerequisite for long-term financial transactions. We know that without long-term economic planning there can be no significant economic development. The stability of the value of a currency is therefore essential to economic growth. Because, the currencies of industrialized nations store value, coins and paper currency normally constitute only about one-fourth of the money supply; the rest is usually in the form of demand deposits and time deposits on which cheques are drawn.

Can we say with certainty that the Naira still fulfils those three functions satisfactorily?

The Naira may still fulfil the first two functions, but it badly lacks the ability to store value.
When a currency has a bad reputation to store value as the Naira, people understandably would tend to keep their money from the banking system and spend it quickly to avoid loss in real terms. Yet we know that this does have severe consequences for the economy, as a large percentage of the money supply is exchanged from hand to hand. The absence of such cheap money within the banking system makes loans from banks to small and medium-size entrepreneurs almost unaffordable. Thus, creditors are most likely to charge such interest rates, considering the problems of time lag, for their scarce resources that would give enough room to offset any eventual loss in value for the time the money is paid back in the future. However, if the small and medium-sized companies that create the highest numbers of employment in developing countries have no access to cheap loans, they are unlikely to be able to grant delivery credits (a short-term financial tool) to other companies. Without these facilities, companies cannot operate at capacity and to their full potential. As price stability is fundamental to sustainable economic growth, the Naira is a major contributor to the ill health of the failing Nigerian economy.

WHAT IMPACTS DO EXCHANGE RATES HAVE ON DEVELOPMENT, economic growth LIVING STANDARD?

It is increasingly becoming evident that the inability of the Naira to store value is among the most important factors responsible for the disturbance in our economy and this dilemma is determined by external markets. The exchange rate of the Naira is doing enormous damage to the Nigerian economy and unfortunately bringing poverty to the masses. A system of floating exchange rates, by which the price of the Naira is established in the marketplace and this varying with supply and demand conditions, supposes that imbalances between exports and imports are adjusted automatically by changes in the exchange rate, rather than through government intervention. It is doubtful, if such a marketplace, an arrangement, without social balance is a place for developing countries to put their nations’ fate and expect a fair deal. As this system is imperfect, only rewarding the strong economies and punishing currencies representing dwarf economies, it is a source of major disturbances for the developing economies, no matter how hard they try. Quite disturbing is the arrangement that determines the exchange rates of currencies by the following factors only:

a) Nigerian imports/export
b) Short and long-term capital flow abroad by Nigerian businesses as against short and long-term capital in-flows from foreign businesses and investors.
c) Other public and private payments from Nigeria to other countries as against other public and private payments from abroad to Nigeria.

We have wrongly assumed in the prevailing logic that all economies are equally developed, with the same level of education and technology level, with equally developed capital and financial markets, efficiency, productivity level, real income levels, etc., hence all economies are required to compete by the same rule. To put it simply, the conventional theory draws its logic from the argument that when a country’s currency exchange rate, due to a deficit in export/import and capital in- and outflow, depreciates, local products become cheaper and therefore lead to higher demands and growth neglects the specific domestic factors, such as the social conditions, the structure of industries, income disparities, other specific geographic and environmental factors, etc., that are essential for economic growth. Empirical observations have shown that because these important domestic factors are neglected, devaluations have had the contrary effect. There is no known developing country where devaluation has led to sustainable growth and the creation of wealth for the masses. Instead, they have often led to a series of problems that have sooner or later led to the next devaluation, starting a spiral of economic decline.

Developing countries should be cautious when it comes to the devaluation of their currencies, as every devaluation destroys part of the wealth of their citizens. They have to fully analyse the macro-economic impacts, first looking at other options, they must ask themselves, what they consider more damaging, as the merit of having an equilibrium exchange rate in the current world economic dispensation may be relatively small compared with the social cost to society and the loss of all the goods and services of all the people becoming unemployed in a Nation, resulting from imported inflation.
In the case of the Naira, because of the volatility and unpredictability of the value of the currency most people with fixed money incomes, retired people, white-collar workers, and public employees are suffering a dramatic decline in their living standards, consuming less, as they get poorer by the day with their Naira at hand. As the exchange rate of a nation’s currency does affect the production and employment level, and living standard of its people, it is a national issue that affects everyone and must therefore always be discussed broadly before changes are made.

DO DEVELOPING COUNTRIES HAVE AN OPTION OTHER THAN ALLOWING THEIR CURRENCIES TO FLOAT?

I should think that since the purpose of government is to bring prosperity and not poverty to her people, the following questions must be addressed with all other options taken into consideration:

1. Are we a net importer/exporter (what is the structure of our foreign trade, do we import food and other consumer items in large quantities that can hardly be substituted by local productions?)
2. How is the structure of our industry (are we solely a raw material, half-finished products supplier or are we a supplier of high-end products as against how many millions of Nigerians, who in certain sectors still depend on imported materials and machinery, spare parts, vehicles, chemicals that will become more expensive from abroad
3. Can we increase our export by at least the same margin/percentage as the devaluation?
4. Do we expect a net gain of capital inflow?
5. What are the expected positive impacts on the economy and living standards of the masses?

I argue strongly that if the answers to the above are not convincingly positive, developing countries should consider other options, other than devaluing their currencies, as devaluation under such circumstance only lead to better terms of trade for their trading partners with no benefit for their economy. The Nigerian experience has demonstrated that when a country is a net importer with her most important export commodity being crude oil, quoted in the dollar, whose allowed export volume and price are fixed outside her boundaries, devaluation would make little sense as the demand for crude oil which amounts to over 80% of her total export volume would not increase and lead to any economic growth. It is therefore not surprising that the Nigerian economy has been fairing poorly ever since the devaluation experiment was started. Nigeria no doubt would be faring better by either pegging her currency to the dollar or a basket of the currencies of her most important trading partners, like the dollar, Euro and the Yen. I admit though, that the idea of the mixed currency basket is still in development that I hope to discuss fully in another paper. Now, depending on the movement of the currencies in the basket to one another, the exchange rate of the Naira shall be determined by an index and reviewed once every month. This can be called “controlled or managed floating”.
Most policymakers in developing countries seem misled to assume that after deregulations and opening up the capital market followed by currency value devaluation, the market just takes care of itself producing those desirable results with the invisible hands doing all the magic. Yet we know that some of these medicines can be fatal to the health of a developing country, as uncontrolled import and capital outflow in times of economic crisis often lead to a worsening of the initial crisis that leads to the measure. The measure punishes those that are designed to help and reward our trade partners with better terms of trade.

Such developed economies as Austria and Switzerland which are amongst the richest countries (income per capita) in the world, had their currencies pegged to the German Deutsche Mark until the introduction of the Euro 2 years ago. The Swiss Franc which can be considered among the stronger and most stable currencies of the world is not floating freely; it is more or less pegged to the Euro. The stability pact signed by all European Union members before the Euro was introduced that sets a limit of a maximum 3% fiscal deficit for all countries of the Eurozone was designed to keep the Euro strong and stable. Thus, if the conventional theory, was always right, that devaluation leads to higher demand for local products and growth, then generally speaking periodic devaluation should be desirable, but why should the European Union actually be relentless in its efforts to protect the value of the Euro and avoid just that. Why the Europeans aren’t happy to have a weak Euro as this is good for European export is because they know that the merits are often outweighed by the demerits of higher costs for imports and other services from abroad that could eventually lead to imported inflation and economic decline.

IS THE PRESENT WORLD ECONOMIC ORDER A FAIR ARRANGEMENT FOR DEVELOPING COUNTRIES

The current world economic order appears unfortunately responsible for the increasing economic decline and poverty in many developing countries. The system requires us to leave economic development to private sectors and market forces alone. It requires us to open up our markets and deregulate all sectors so that others can come in and leave as they please, without taking into account that developing countries lack the resources to go into those markets and do likewise. It sets the rule according to the needs and economic standards of the strongest and declares all are equal and free to fight by the same rule. It is like putting a well-trained Mike Tyson, or a current world champion in boxing with an undernourished farmer from some remote parts of the world in a ring and declaring them healthy adults and wishing both luck to fight by the same rule with the winner taking all the yields. The farmer would not only obviously lose the fight and starve but even risk being killed in the process. It is a system for the survival of the fittest that is increasingly enriching the industrialized nations while punishing the developing countries. For the fight to be fair, we shall need rules that take the advantage of the world boxing champion and the weaknesses of the farmer into consideration. The current world economic order propagates that our “terms of trade” should be determined solely by our net capital movement, and net import and export volume. It is a system that encourages developing countries to consume what they cannot afford, only to be required at rather exorbitant interest rates to service their debts. Governments of developing countries are advised to eliminate all subsidies and eliminate all direct government involvement and interventions in the economy, but we know that the European Union and the US subsidize their farmers and other sectors they consider strategic to them, without listening to what we have to say. We know that most railway systems in Europe are still owned by the government and are subsidized. We know that most of the pension schemes in Europe are subsidized. We know that the social and welfare state in industrialized nations is subsidized. We know that social emergency programmes are in place for their citizens' benefits which most people in the developing countries do not have. We know that the European Union and the US have some products on quota and that the number of certain products allowed into the Unions is still regulated and monitored.

By now, shouldn’t we know that to alleviate poverty in the developing countries and move the world economy towards some equity, the theory of demand and supply alone, without some social balance is inadequate to address the challenges of the future. I propose therefore that Nigeria, along with other developing countries initiate an international conference on how best to determine just and fair terms of trade between developing and developed economies. I envisage a time when the terms of trade between nations are not just reduced to and depended on net import/export and net capital flow but by such formula, in which such indexes as those of production factors, the real increase in GDP, Import/Export, capital flow, income per capita and some other social components that would purposely reward those developing countries willing to reform.

There can certainly be no sensible economic theory to justify why a university graduate in a developing country should work about twenty times or more to exchange a product with a colleague of the same discipline in a developed economy, just because the one graduate lives in a country that is a net importer and his country is not attracting a surplus in capital movement

Surprisingly, policymakers in international organisations have unfortunately not realized yet that there is a positive correlation between a rise in real income in developing countries and the quality of economic transactions with their economies. Not until there’s the awareness that developing economies differ from developed economies in numerous ways, and this inequity is considered would the world economy by addressing the challenges of the future and not subject the developing countries to increasing poverty.

Unfortunately, the IMF which was created solely to balance out the imbalances of the present system has itself become part of the problem. By operating the business of the IMF like a private bank, with an authoritarian approach, imposing untested conditions with their rather exorbitant interest rates, they are driving numerous countries to the brink of bankruptcy. It has sadly become a self-serving institution helping to widen the gap between rich and poor nations. It has developed into an institution that thrives on the weaknesses of the present system, hindering developing nations to address those weaknesses. It is unique to have a system whose sole beneficiaries have reserved the right to have the last say, keep majority votes and even veto any initiative by the victims of the system, yet they are told the system is to their good. The IMF imposes their untested and devastating “shock therapy” on developing countries, while countries of the developed economies are practising offensive but soft approach strategy in their economies.

It is indeed counterproductive to demand that governments of developing countries relinquish all involvement in the economy when we know that without government participation, most investments in the developing economies would not take place. This is not to argue that fiscal discipline and the concentration of government activities on reduced functions have not their merits, but the reality on the ground have often shown that without government the private sectors in some of these economies cannot be developed. Whilst we need liberalization of the local market, considering the specific conditions of the environment, uncontrolled privatizations can lead to economic decline. I just want to remind the Nigerians that the so-called indigenisation decree, of the seventies, was also a privatization scheme though forced in character. The point is that that decree forced many expatriates to abandon their investments to Nigerians at give-away prices. We know that less than just two decades later our president is travelling around the world to beg those that were thrown out to return to help build Nigeria. We created Nigerian Managing directors who could not run those businesses successfully. Some of the businesses were destroyed in less than ten years and others in fifteen. All those well-paid employees were gradually laid off and today nearly all of those companies are either folded up or are just shadows of their glorious days. This paper is not denying there are merits in an economy with a broad base of private ownership; what it is arguing at this point is that privatization strategy must be selective in approach and not viewed from a microeconomic perspective only, particularly since such sales only bring a one time yield that often disappears after one fiscal period. More important is the question what are the additional macro-economic benefits of such a step to the economy. It is not good enough to argue that these companies can become profitable after private ownership if an increase in prices and reducing workers are part of the cost reduction strategy. For any government privatization to be considered successful, it must generate spin-off effects, lead to expansion, more employees, and cheaper prices in services. The Government would have to consider eventual social costs as part of the deal. It is only when the macro-economic benefits are obvious, that privatization of any industry should be carried out. Yet the governments of developing countries are advised to identify those few sectors they consider of strategic importance to the nation and remain involved, if even as a minority stakeholder to avoid a complete sell-out and development of such sectors that may be contrary to strategic development policies. Developing countries are advised to take the faith of their economy and currencies into their own hands by deciding which way to go and actively organising factors to their requirement.

IS INTRODUCING A NEW CURRENCY OR RE-INVENTING THE NAIRA AN OPTION?

Given the importance of a stable currency for economic growth and the current state of the Naira, an offensive approach appears inevitable for the revival of the economy. As the Naira appears to urgently need reform, I am proposing a debate on the following options:

a) Re-introduction of the Naira. The Naira can be reformed and re-introduced and named the “new Naira” the conversion of the present Naira to the “New Naira” shall say 100 to 1; that is 100 units of present Naira for one “New Naira." Each individual should have to say between 2-3 months to convert his money. The exchange rate of the new naira should be oriented towards a currency basket of the US Dollar, Yen and the Euro. This basket should be reviewed as already discussed above. The base index of 100 can be reviewed after a period of say every 2 years. The recent crisis in Asia has illustrated that those countries with some sort of control over their currencies have survived the crisis with little depreciation and least turbulence. Other developing countries should learn from the experience.

b) Introduction of a new currency. The introduction of a new currency, whereby 100 units of the present naira shall amount to 1 of the new currency. The advantage lies in starting all over without the burden of the bad reputation of the Naira, offensively moving forward to win back the confidence of our people in our currency. The floating basket for determining the exchange rate discussed above shall apply to the new currency.

In both options, the conversion shall mean smaller domination with stronger value, eliminating the present inconvenience of having to transport money in bags, when making such banal transactions as buying a refrigerator. But, the reform can not be about changing figures and names alone, it must be a reform that leads to a change in the real income of the people. Let us debate:

As the objective of the reform must be to curb inflation and pursue price stability and economic growth, fixed salaries should be converted by a ratio of say 100 to 1. However, to stimulate future consumption, let a “fixed deposit” with a minimum of 3-year maturity be converted by a ratio of 80 or 85 units to 1; i.e. if one had a savings of say 200.000 on a time deposit, after the conversion his savings in the new currency would be either 2.500 or 2.353 units of the new currency. Anyone wanting to take advantage of the “fixed deposit” conversion rate must open an account and put his money in the bank. This money shall be non-withdrawable for a minimum of three years. The purpose of the fixed deposits will be to increase the working capital of our banks. This money shall be used by the banks to give cheap loans to small and medium-sized companies to create employment. Whilst the individual converts his salary at the normal rate, the value of his fixed savings will appreciate. This approach I call the “selective approach." The selective approach will not only keep the present price level stable but stimulate the economy through higher investments and create the base for sound economic growth. Prices are likely to adjust around a ratio of 100 to 1 since immediate demand would depend on the disposable income.

Why Concentrating our Resources is important

If economic progress is to be made, and this happening not by coincidence, the only way therein is through a well-developed long-term concept of concentrating all of one’s available resources on a few objectives at a time. When we spread our available resources on too many projects, we over-stretch them, resulting in allocations to projects that are too small for any impact to be felt.
Per strategic objectives, governments in developing countries, must take those strategic initiatives and continuously influence their directions through their policies. The policy of concentrating our resources includes concentrating the minds of our people. Nigerian of all walks of life both at home and abroad should be engaged. By engaging the minds of those experts in a particular sector, the government would be concentrating the resources of the intellectual capacity available in that sector. The ultimate goal of such engagement must be to understand the consequences certain actions could have, what tenets the society is going through, what lessons are to be derived and what measures must be taken to prevent a negative chain of reactions.

No developing country can succeed in simultaneously developing all its economic objectives the same time. They would have to pursue a strategy of “unbalanced economic growth." To illustrate, let us assume that the government of Nigeria has drawn up a list of her strategically important sectors and because we produce crude oil, the oil industry is a priority sector. Because we have an enormous comparative advantage (raw material under our backyard), refining oil in Nigeria would make good economic sense. In pursuance of this policy, the government shall continue to build refineries until at least domestic consumption and demand are satisfied. The government can go a step further, taking advantage of her comparative competitive advantage, by installing additional capacity to produce more than locally required, selling the excess to neighbouring countries. This strategy would yield the following benefits. 1) domestic demand can be provided at affordable prices that can help stimulate the growth, 2) The more refineries are available the higher the number of qualitative employment opportunities the sector and relating industries shall offer, 3) Imports shall be substituted reducing pressure on the currency, 4) Increase in export volume of finished products with foreign exchange earnings, and 5) there shall be great spill-over effects on related industries. However, for the refineries to function they require chemicals and other inputs to produce and companies to take charge of logistics and distribution of the refined product. Because of the eventual high demands of chemicals required, some chemical-producing companies are likely to be attracted to invest and produce locally. Such chemical companies are likely to produce for the refineries and other chemical-related industries. And because there is this large chemical company in the country, other industries that have a chemical-related base will eventually site their plants in the country. Under this strategy, the government has focussed on refined products only, but may eventually get good chemical and related industries.
Only when those set objectives are achieved, is it allowed to shift emphasis to a new objective. The constant dis-equilibrium caused by this strategy lure investment in a rather steady flow to affected sectors at a manageable and sustainable rate.
As our resources are scarce and limited, we must set our priorities every year and that priority list must contain those few most important projects starting from 1 to x. This priority list implies that problem number one must be solved before problem number two and number two before three and so on. If all problems are to be solved effectively, and not in a wishy-washy style, problems on the list must not be addressed at the same time.

What is this paper suggesting here; it is talking about strategic planning and implementation. It is said that setting clear goals with time limits and pursuing them with all our disposable resources are the only way to achieve progress and economic development.

Before setting the priority list, the following questions must be answered in detail:

· What are the burning challenges to our Nation and how are they likely to affect our future
· Which of them do we want to address and at what priority?
· What specifically do we want to accomplish in that sector in the next one to five years? We have to be very specific.
· What are the macro-economic benefits of achieving such goals? They have to be quantified.
· What specific steps do we plan to take to achieve those objectives? What are the resources necessary and who is involved? What must we do first, second, third and so forth on our way to achieving the set goals?
· What are the problems we will have to overcome to achieve those goals, and what are our plans to address them? What machinery is in place to deal with emergencies?
· What are the negative consequences or what are the opportunity costs of not achieving the objective? Where shall we be in 5-10 years, if the goals are not achieved now? How expensive will it be to realize the objective later in the future? What negative effects will it have on other objectives we plan for the future?
· How strongly do we want to achieve this goal? Do we have the political and economic might to achieve the goal? How strongly convinced are we that we have to achieve the objective?
· Where can we seek help to achieve the goal?
· What are we prepared to sacrifice for this goal?
· How would we characterize the goal on a scale of ten with other goals we also want to achieve in the same period?

Detail analysis of answers to the above should help us in setting our goals right. If we are to succeed with economic modernization and growth, we must demonstrate a greater concern for planning, organization and efficiency, a faith in science and technology and finally a belief in distributive justice.

In concentrating our resources, however, we must desist from pursuing isolated projects located in far apart places from their raw materials and not under such obscure titles as Federal character. What a developing country needs are a cluster of industries and expertise. Companies supplying products and services to the same industry should be concentrated in the same region to have a synergy effect. Clusters do not only foster companies working together, but it also encourages the development of specialised facilities. Consumers do also benefit because the cost of transporting raw materials and other services along great distances is eliminated or reduced to a minimum, reducing the final prices of products. They are in this way not only more efficient but are more cost-effective.

CONCLUSION

The misunderstanding of the Concept of Globalisation

The concept of globalisation as presently in discussion (liberalization of production and free capital market, deregulation and removal of all national discriminatory laws) does offer the world economy enormous growth potential. But this growth must reach all corners of the world for it to be beneficial to all. The present discussion and arrangements can only be to the benefit of the developed economies and perpetually to the detriment of the developing countries. For globalisation to yield those mutual benefits for all, we have to first of all address the disparities in our present system. If the discussion does neglect the weaknesses in the present system in supposing that all economies are equal and must compete under the same conditions and rules, then globalisation in its present state is not in the interest of developing economies. Then some laws that protect local production and market and capital movement must continue to be in place. These laws must be in place until we have achieved such strengths and technological advancements to compete fairly as equals. Removing those laws that regulate our capital flow with other economies would be tantamount to economic suicide. I suppose that the first step to a successful concept of globalisation is the “countrylisation”, which means the objective of any new policy shall be liberalisation, deregulation, elimination of all monopolies within a country, and encouraging anyone who wants to participate in local investment and production to be welcomed without any discrimination. At this phase import substitution through local productions must be given priority, telecommunication and other vital infrastructure upgraded, the emphasis laid on educational quality and the banking system re-organised.
To liberalize and deregulate does not however automatically require any nation to privatize and sell off those industries, often governments of developing countries have a social responsibility, they need to balance out the hash impact of the privately run economy. There are often cases where government-owned companies have been sold to private companies that ran the companies efficiently and started making profits but at the cost of laying off a large percentage of the old workforce. Government must see economic evaluation from a macro-and not a microeconomic perspective…… social costIn fact, one can even argue that the reverse is recommendable for developing countries. We live in a world in which large companies are merging to enable them to succeed and survive without having to stretch their resources across the world. Since such companies are profit-oriented, they naturally divert their resources to those areas where profit is highest. So a country left to the pulses of globalisation may be confronted with a situation where a large part of the working capital can be withdrawn and directed to another nation within a short time, where short-term gains are higher leaving the other country to bleed to death.

Policymakers in developing countries would be ill-advised to embrace new trends uncritically without putting their interests at the forefront. Whilst there are prospects in opening up and liberalizing a large sector of our economy, certain areas must be identified as essential for our national development and therefore protection-worthy. Policymakers have the responsibility to strengthen such areas by investing and keeping them so strong that they eventually become self-sustainable. It is indeed shortsighted and perhaps even foolish to assume that the developing economies can presently compete with the developed economies by the same rule. This is like putting Mike Tyson (the world boxing champion) in the ring and asking an adult farmer from a village to get into the ring and then declare they both have equal rights as adults and are both male and start a fight under the same rule. The village farmer does not only risk losing the fight before it gets started but might get killed in the process. You see, you can not put a shark and a seal in the same pond and say, well they are both animals that live in water, let us just feed them and watch to see which will multiply. The starting point of all nations today are not the same, therefore the rule of engagement can not be the same, the weaker nations do not have the infrastructure to even enable them to attempt to compete.

Developing countries are advised to, first of all, protect their economies and build those infrastructures and industries to that point where they are self-sustainable before they can consider competing on an equal basis. Any other strategy is not only self-delusion but self-destruction, as nobody is forcing anyone to do anything.

In developing countries, the provision of services for such areas as health care, education, transportation, communication, and energy supply can be liberalized but the management and creation of required infrastructures, as these are fundamental infrastructures whose benefit at affordable prices must be considered essential to growth, must remain the responsibility of government. Liberation or deregulation does not mean full privatization. The full privatization of monopolies would make economic sense, only if there’s a certainty that they will not only be more efficient but through higher competition and price reduction bring benefits for consumers.

Unfortunately, Nigeria is an example of a country without any plan and vision.
Fuel prices are rising due to the weak currency. Nigerians are facing the impact of a nation with a weak currency. The only way a responsible government can react to imported inflation is by doing all it can to build those industries to substitute those products that are imported. There’s no reason why we should export crude oil at a giveaway price and import their refined products at exorbitant prices to build more refineries and enhance local production, creating further infrastructures and adequate employment opportunities. What is it that is wrong with us Nigerians to be happy importing a product we can produce cheaply, whose raw material is extracted from our backyard? We have the raw materials, the manpower and the raw materials. What should God give us to enable us to develop? We have to embark on job creation projects, like embarking on a double-track trans-Nigerian railway system that cuts across all the states of the federation. We have to put more effort into our energy generating and distribution capacity. We have to pay attention to the maintenance of our road network. We have to pay attention to the quality of our education.
Are the people we have in power so naïve to believe big foreign investors will line up to come to Nigeria, just because we say everything is okay when there are no reliable transportation means when the roads are death traps? How can we expect them to come when such basics as uninterrupted electricity supply, security for life and property are not guaranteed and even law enforcement is a foreign word on the ground. We don’t need to beg anyone to come to Nigeria. Nigeria is a very big market, when we have put the right infrastructures in place and the climate is conducive, investors will come begging us to be allowed to build factories in Nigeria. But we must, first of all, make those sacrifices and clean up.
The government has to create an environment where creativity and innovation are encouraged. To give our people a strong sense of compassion and social unity. Whilst we need an enterprising, highly creative economy, we must create a community with strong social bonds between people and government and where a sense of responsibility, obligation and duty towards others are a matter of course. We must create a society in which multi-cultural heritage is not an obstruction but a motor to national development. The only road to a great future passes through a society where women feel equal to men, where opportunities are not determined by sex or regional belongings.

How can outsiders take us seriously when we are incapable of doing anything good? Before the British left, electricity shortage was unknown, shortly after their departure, electricity shortage suddenly emerged and has since become an accepted way of life and no one genuinely cares, despite the abundance of resources and manpower. Before the end of colonial rule, we had one of the best educational standards in the world and now we probably have one of the worst in the world. Our economy was strong, though, at a lower equilibrium, our real income was worth something and a family could live on it. We had labour offices in the cities where people seeking employment went. We had public toilets in some cities. Our railway system was functioning and hauling goods and people across the Nation. Our roads had few potholes. The Airways had aircraft and our shipping line had vessels plying the oceans of the world. Security was a common commodity everyone took for granted. Justice was independent and fair. The army was disciplined and people behaved and society honoured those who did something right and sanctioned those bad elements in society. Tribal problems and agitations were hardly known. Life and living standards were more or less in harmony with the environment.

What good is government, if everything is turning for the worse, yet incapable people continue to rush for positions sailing on the wind of tribal sentiments. It is hard not to sometimes wonder, what kind of human race we are, that despite the abundance of material and human resources, we just collectively refuse to use our heads and do a few things right, instead we watch as things are decaying before our eyes
· Lack of employment security: The present policy of retiring people before they reach the age of retirement after the government has spent a lot of money to train the people is disastrous for any economy. These people have spent years in their jobs, gathering experience, they understand the problems of their jobs and are retired when their contributions could be best felt for the nation. When you retire a group under pension age with full benefit, if what they were doing were useful to the establishment, then you have to replace them, with people who lack the experience of those you have just retired. Thus they need time to gather experience and learn the trade. Apart from this obvious fall in performance, a reasonable portion of the budget of such establishments will have to be used to pay for the retirement of those who should still be on active duty. Consequently, this does not only create a shock but creates unease in the organization as others know it can also happen to them, when a new leader takes over, so they begin to steal in anticipation of retirement at any time. Apart from this not creating confidence amongst the staff that remains, we are systematically lowering the performance level and readiness of the organization. If we have a system that only punishes but never rewards, then we cannot be surprised that people expect no justice as they seek justice or take what they think they are entitled to by themselves. The culture and attitude of retiring people abruptly or before the age of retirement is also a sign of a lack of respect for our people that should not happen in a modern, disciplined and law-abiding society. The damage to the society and economy far outweighs the benefit and should be stopped and forbidden immediately. We should not do to others what we do not want to be done to us.

When I speak of a citizens' covenant against corruption, I refer to a renewed determination, a promise or commitment by Nigerians to do something about the rampant infamy of official corruption that holds our nation hostage. It would seem that up till now, every prognosis proceeds from the assumption that nothing can be done by anyone about the problem except the government; and that only a government with the political will and clear understanding of the problem can address it. Well, Nigeria has been waiting for the right government in vain. Therefore, it is time for us to begin to seek the solution amongst ourselves, because if Nigeria, by the implication of Transparency International's Reports since 1996 at least, can be regarded as having one of the most predatory elites of our times; the people themselves must also qualify as some of the most complacent in history. It is so easy to get into the groove of regarding the ordinary Nigerian as a 'victim' of corruption, but a more circumspect look would reveal that he/she is more likely to turn out an unstinting participant or a bastion of encouragement, advertently or inadvertently.

If corruption is undesirable, then we must address ourselves to their causes to have success in bringing about solutions. If our short-term policies do foster long-term corrupt practices, we shouldn't be surprised that corruption is growing. It is important to pay our employees that salary that will enable them to sustain themselves in modern society not only to meet their basic needs but also allows them to grow, just as those making the policies want to grow. If employees know that they will never be sacked unless this is unavoidable, they will never be retired before their age of retirement. Sacking should only occur if they seriously violate certain agreements or in the case of certain constellations occurring, but these conditions must be known to all parties in advance to reduce an atmosphere of distrust and consequently the temptation of stealing or fetching for rainy days. It is important to create a reliable pension scheme, it is important not to retire people who have not reached their official retirement age, it is important not to promote people because of their tribal belongings but by individual merits, to encourage them to work harder, if they want to be promoted.
The over-devalued Nigerian currency and consequently the imported inflation and following hyper-inflation also have played their parts. To attract foreign investors and Know-how, it is important to avoid all zig-zack directions in the future. Foreign investors must not only be allowed to own a 100% share of any business not considered in
immediate national interest but we must also desist from debating such issues that might shake the trust of the investors in our system as we show a willingness to learn from past mistakes by correcting them quickly

· Lack of opportunities: If a person does not see any chance of rising or making a career, he is likely to become indifferent with time. If because of the way he is treated, he lacks job satisfaction, he is likely to be indifferent to the fate of his employers, he may take to corruption to satisfy those needs he can not fulfil at work.

· Bad wages are probably among the biggest motors that propel people into large-scale corruption. Now, if you employ a worker and pay him an average salary of 5000 Naira. If he has no car, he needs to take public transportation to work daily, if he needs say 50 Naira daily, at the end of the month he would have spent about 1000 Naira on transportation alone. If he spends say 50 Naira daily on lunch, he would be spending another 1000 Naira on lunch. The cost of clothing is not yet inclusive. If the employee has a family consisting of a wife and two children, the 3000 Naira left may not be enough for meeting other needs.

· Lack of social security: A modern nation must create the right environment and infrastructure for its people so that they can look to the future, particularly in old age with optimism. The absence of good and workable social security for its ageing people can create a set of problems and force a people of a nation in two directions; namely population explosion or corruption:
·
a) People are likely to have more children since children become the only means of security at old age. As we know, a population explosion has its own set of problems. We lack the ability and resources to create enough employment opportunities for the growing population. When there are many members of a family unemployed, the burden on those working can force working family members into fraudulent activities.

· When a worker knows that he has no substantial pension as he approaches his pension age, he is likely to become restless as the thought of retirement means poverty and a bleak future. The worker is likely to begin stealing and cheating the company where he works in other to save enough money for his old age. So, in a way, the lack of social security for our age can lead to a set of problems. Thus, create a social security system for our people and we will be on the path to a better people.

HOW BLUNDERS OF THE PAST STILL HUNT US TODAY

I just want to mention three blunders that have been devastating to Nigeria. They are the so-called Indigenisation decree, the Udoji awards and the so-called Federal character in filling vacancies. Of all the above, the indigenisation decree that forced many expatriates to abandon their investments in Nigeria may have been well-meant, it was devastating for our economy. Just about two decades later our president is travelling around the world to beg those they threw out and more or less confiscated their properties to return to Nigeria. And we appear to believe they are all going to just pack their bags and rush to Nigeria, assuming Nigeria has the right infrastructure and can guarantee life and property. Were they not in Nigeria and wasn’t the economy booming then, didn’t we think with our peculiar mentality and short-sightedness that we must own those businesses by force and we could run them better. Wasn’t one of the reasons because we didn’t want them to be transferring their profits home? We want people to invest in our country but they are not allowed to take even the profit home without our permission. Therefore, we created Nigerian Managing directors who destroyed those businesses, some in less than ten years and others in fifteen. All the thousands of well-paid employees were gradually laid off and today nearly all of those companies are either folded up or are just shadows of their glorious days. That single decision was one big economic catastrophe Nigeria has not recovered from till today. A few Nigerians may have gained the title of Managing Director, but Nigeria as a whole lost heavily.
Besides, the personal misery of a declining economy resulting from prolonged periods of high unemployment; such as the loss of personal identity, disintegration and family challenges, it can also threaten the conduct of society and shake the base of the social system.