By Lawal Nasir
Bismarck Rewane, the CEO of Financial Derivatives Company, is an economist of note. But as recent developments showed, he can also be subjected to misfiring (and this is not a friendly fire). He can also be misquoted and or interpreted wrongly, even mischievously. As an authority in the field of economics, Rewane’s insightful analysis on important issues are highly sought after by many media houses for the benefit of their audiences.
But in communication parlance, there is a remarkable difference between speaking and writing. For instance, when one speaks, especially off the cuff or impromptu, you tend to hear lots of repetitions, interruptions, incomplete sentences, and digressions. But writing is different, because one has the chance of having a draft and using the eraser. One can also edit his draft to polish his words, make them less ambiguous and more engaging.
So when Rewane, on Friday on Channels Television, discussed the recent and ongoing improvement of the stability of the naira, even the newspapers, who decided to do a story from it, fell short of giving their readers enough information for them to understand the import of the economist’s intervention. They settled for what they believe their readers would want to read.
One of the newspapers produced a story titled ‘Naira’s rally is temporary, don’t get carried away — Rewane warns’ and went ahead to quote the economist as saying “We’re seeing that the naira is strengthening but with caution. Let’s not be too hasty because it’s going to correct itself… There are many things that are happening: reserves of over $40 billion are coming down. We’ve also borrowed $4 billion in bond issues.When you look at all of that, we’ve almost spent $8 billion to support the naira at the current levels.”
Then on Monday, another newspaper opened with a screaming front-page headline: “How FG spent $8bn to support naira – Rewane”. In the report, which was also based on the Channels Television appearance by Rewane, the story said “The federal government has spent approximately $8 billion to stabilise the naira” and attributed same to the renowned economist.
For validation purposes, and to show some form of fairness or balancing, the newspaper said CBN’s Acting Head, Corporate Communications, Mrs Hakama Sidi Ali, could not be reached for respond to Rewane’s ‘take’ as she did not pick her calls and did not also respond to a text and WhatsApp messages before press time. It also reported the Special Adviser to the President on Information and Strategy, Bayo Onanuga, as saying in a text message that the claims by Rewane were not true as well as a ridiculous statement to make.
The intention may not be to paint the Central Bank of Nigeria (CBN) and, by extension, the Tinubu Administration in bad colours, but it was a very unfair commentary, especially when most readers hardly go beyond the headline due to the deluge of information they come across everyday. So many online news platforms just reproduced materials verbatim without any form of explanation.
The reality is that Nigeria’s apex bank, under the leadership of Olayemi Cardoso, since assuming office in 2023, has been carrying out reforms to not only restore sanity in the financial sector but also put the economy on the path of sustainable growth. Indeed, in the past 16 months, the CBN had prioritized stabilising the foreign exchange market, strengthening the Naira’s competitiveness, and boosting investor confidence in the Nigerian economy, the result of which we are seeing today. The bounties we are beginning to reap is as a result of a combination of policies and measures sowed by the CBN, including the recent launch of the Nigeria Foreign Exchange Code (FX Code) which aims champion integrity, fairness, transparency and efficiency in Nigeria’s foreign exchange market.
Speaking recently while hosting Airtel Africa’s management team, led by Group Chief Executive Officer Mr. Sunil Taldar, at the CBN headquarters in Abuja, Cardoso emphasised the need to reduce the telecom sector’s reliance on foreign exchange, urging the players in the industry to embrace backward integration by producing essential components such as SIM cards, cables, and towers locally. “This shift,” he argued, “would not only ease dollar demand but also create jobs.”
Expectedly, Rewane, for those who have been closely following developments in Nigeria’s financial system, is not a rabblerouser, one who is given to not seeing good in actions for sinister reasons. He speaks with conviction, not for applause. When he realised the misrepresentation his intervention was being subjected to by some news platforms, he wasted no time in clearing the air. Speaking on Arise TV on Monday, the very day a newspaper reported him as detailing ‘How FG spent $8bn to support naira’, Rewane explained that Naira’s rally in recent times hasn’t been solely due to direct interventions by the CBN, citing new data to back his position.
According to him, “the policies are working because we can see the difference between the parallel and official rates have been bridged, market and price discovery is efficient, the balance of trade is positive ($18.6 billion), terms of trades are positive, money supply growth is reducing and are now falling slightly to $74.”
While expressing confidence in the CBN’s foreign exchange policies, which are yielding positive results and aligning the naira closer to its fair value, Rewane explained that a Purchasing Power Parity analysis placed the fair value of the naira at 1,102.15/$, meaning the currency is currently 26.35 per cent undervalued. He explained that while intervening to protect an overvalued currency can distort market forces, supporting an undervalued currency helps correct misalignment.
And with the increased collaboration between the monetary and fiscal authorities, as demonstrated at the recently concluded Monetary Policy Forum organized by the Bank, the prospect of achieving the mutually beneficial objectives of price stability and sustainable growth gets more realistic than ever.
Nasir, a journalist, writes from Abuja
