News making rounds in the media has it that the minister of Information and communication, Alhaji Lai Muhammed said in an interview aired on FRCN radio link that the present economic situation is beyond President Muhammadu Buhari.
Thisdaylive in a story entitled: “Economy Gone Out of Buhari’s Control, Says Lai Mohammed” published on Saturday 12th of March, 2016 claimed that the minister made the emphatic statement insinuating the government is helpless in the present state of the economy.
A closer look at the interview excerpt reveals that the minister was quoted out of context, responding to the question: “The free fall of the Naira in the last three weeks has been very discomforting and a lot of people are asking a lot of questions and some people even say wow, it has never been so bad. Has government been able to discover (the source of) this untoward development”, the minister responded in the exact words below:
Lai Mohammed: I think it is clear why the naira is today in a free fall. You see, what are the factors that determines the exchange of the naira? It is your export and import; your trade balance and the general economy. Unfortunately we have not been fortunate in any of these, which is about 70 percent of all our total earnings. Before now, oil was selling for about N100 per barrel; today it is about N30 per barrel. And if you look at the cost of production, it has remained about the same.
We have lost about 70 percent of all our income and not only was oil responsible for all our income, it was also responsible for about 90 percent of all our foreign exchange, which makes between 90 -80 percent of our source of foreign exchange.
And naturally there will be more pressure on the Naira and less dollars and more naira chasing the dollars and now look at the balance of trade – it is negative. What do we do with trading and how much did we buy from Britain, for instance, and how they buy from us,. Unfortunately, it is negative. We take more from them than they take from us. If a country suddenly loses about 80 percent for its source of forex, clearly that currency will be in trouble.
The only way out is what the government is doing, which is strengthening the economy, diversifying it, plugging all the loopholes and making sure that only the essential things are imported. It will be extremely difficult, no doubt, but we are also in a state of emergency economically. You see, take for instance, your earnings reduced from N100 to N30 per month, something will have to give way…like relocating to a smaller house and I mean this is a reality.
The fact that the government is even still managing this situation, I give credit to the government, because the situation is completely beyond their control, and this is where people have been mischievous…
Today we live in a global community, Nigeria cannot determine the price of oil or gas. And that is why the presiident has gone spending countless nights lobbying, rallying other oil-exporting countries on how do we stabilize the oil price….
The Minister was specifically asked about the exchange rate situation. He tried to explain the factors that influence the rate making reference to oil price. He simply said the SITUATION (exchange rate) was beyond the president since he does not control oil price. He never said the ECONOMY was beyond the President’s control as misrepresented by the media.
The minister clearly responded to a question bordering on foreign exchange, using the oil price as a point in his explanation as to why the naira is in a free fall, since the federal government cannot directly influence the price of crude oil, it is obviously out of their jurisdiction to stabilize the naira considering the fact that about 80% of our foreign exchange is from crude oil. This obviously is not referring to the nation’s economy, rather on the challenge of the naira free fall which logically is beyond the FG control at the moment.
Having a professional journalist in a national newspaper as THISDAYLIVE lacking in English comprehension is a matter of unethical and professional delinquency. It could also be as a result of the influence of a sensational storyline tied to a matter of national interest that involves a personality of a minister of the federal republic.
The minister through his personal assistant has since clarified his statement, but then the overzealous reporter further exposed his ignorance by again claiming the story should be taken serious. This is absolutely a matter of comprehension and reporters should pay attention to context before arriving at a conclusion.