Devaluation: The Gospel of Foreign Lenders


 According to the word web dictionary, devaluation is simply ” the official lowering of a nation’s currency…” or ” The reduction of something’s value or worth”. Unfortunately, this is and will always be the sermon conveyed to developing nations for every time they opt for foreign assistance. After all there is no free lunch in Freetown.

The bitter truth is that the people of developing nations prefer to do away with thorough research before venturing into a deal.

To the regret of many poor Africans nations stuck in abject penury today, they all knew from the word go that the cause of the yoke they now bear is not far fetched – it has always been about reaping what was sown a very long time ago. Unfortunately, since the reservoir of political power in Nigerian is a snob thing due to it absoluteness, only a few dare to sail into it. Ironically, these very few possess the wherewithal to put up a water fountain for their home flowers while pretending to the public that it is a very difficult thing to provide pipe borne water for them. These ordinary “difficulties” are usually the choruses sung to the big economic giants such as China, United States of American, Brazil…

Again, the narrative hasn’t changed. The lunch provided in Freetown doesn’t come freely. Sri Lanka had to hand over a port to the Chinese when they couldn’t afford to pay back a loan they took from a Chinese bank. Well, the Chinese model is tricky but not alarming.

The Chinese model can be likened to what a termite can do to a building if left unchecked. Same goes for the other European nations. However, they always claim saint in for every harm done. They can only claim to play a messiah-role but they are no Robin hood.

In a documentary titled “China, Power and Prosperity”, Mahathir Mohamed, the Malaysian Prime minister warns that “borrowing money from foreign countries without making a payment as at when due causes the borrowing country to loose so much including her sovereignty”. Currently, Indonesian is paying more than it bargained for to the Chinese bank.

On the flip side, the wanton embrace of corruption as displayed amongst most successive leadership in the country has continue to plunge us backward into the days of harrowing darkness.

This harrowing situation is synonymous to slavery except for the fact that this time around, the west is slaving us right here in our motherland. Very recently, the International Monetary Fund under a commanding tone asked the Federal Government of Nigeria to devalue her currency so as to be able to in a way, salvage our already crippling economy. Remember, devaluation has everything to do with losing self worth.

How does devaluing a country’s currency add up to her economy? The current machinery of governance has played into the gimmicks of the lenders. In the words of our economist, our chances of getting back into a stable macro economy has been terribly dwarfed. It isn’t enough to cry foul. The contents were there for all to see but as it is with a nation bent on subverting the will of the people, we are in a mess already.

Asking Nigerian to devalue the naira is simply a call to increase the cost of import. About a year ago, the cost of a brand new Tecno Spark four in the Nigerian market was thirty-two thousand naira (32,000). Today, the same product cost as much as forty-five thousand naira. Of course, the increase is visible on almost every products in the Nigerian market. The higher the price the of commodity, the lower the purchasing power.  So, why would our lenders prefer we lose all? This of course is no rhetoric. The loss of a nation is a gain for another. A win win situation is nearly impossible in the global economy. Without shying away, we all know that the European nations glory was laid on the resources gotten from here.

What if Nigeria fails to payback her backlogs of debt? Maybe the nation will be up for sale! Don’t forbid it just yet. Devaluation  is a sure way to reducing sovereign indebtedness but is it truly a safe end?

Up next: Hidden Clauses Of Devaluation

– Olayinka Kayode Kingsley

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