A long sojourn in the United States of America has not divorced him from the economic realities of his land of birth. Like a typical Nigerian, Mr. Basil Enwebara talks about the problems of Nigeria with passion, always ready to proffer solution any time there is a problem that borders on the economy.

•Basil Enwebara Photo: Sun News Publishing

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Piqued by the recent development in the country’s stock market he has warned Nigerians to be careful because the market itself operates in full of secrecy and fraud.

While x-raying the global economic crisis as it affects Nigeria, he posited that in view of the Chinese incursion into the American market, the likelihood is that the world economy will be measured by renninbi or Yuan. And to that extent, a large portion of Nigerian foreign reserves should be in the Chinese currency or in euro, instead of the dollar. As for the US, he said the American economy is sitting on a keg of gunpowder unless it adopts a protectionist approach to prevent the economy from its current dangerous drift.

‘The Chinese have really benefited from the so-called globalization because a lot of investments have moved from the West to China. When you look at the aggregate return on investments with low tax , you discover that the Chinese have attracted a lot of investments in terms of capital from the West. Also, because of the strategy the Chinese have adopted, goods that used to be made in Europe and the West are now made in China in such a way that there is no country that will compete with China unless the whole world will come together and compete with China. Let’s have a fair and just globalisation,” he said.

The general belief that China is on the verge of becoming the world economic powerhouse was not disputed by the MIT-trained economist. Even America, he noted, did not foresee the danger when it allowed China to penetrate its economy about 50 years ago.

As to whether China can take the world by storm, economically, Enwebara said: “The global economy is such that Americans could not predict about 50 years ago that China would dominate American economy today and Americans cannot do anything to stop it. Having said that, the Chinese are very clever. Chinese are five to10 years ahead of other nations in terms of financial and economic smartness. But China should be ready for counter attacks by the West because of protectionism.

“I was in the United States and I was asked to contribute to discussions and I said, look, in the interest of millions of jobs being lost in America monthly, yearly, protectionism is sometimes necessary. It is necessary when it is democratically and carefully put together so that America will not become a dumping ground. If the Chinese want their goods and services to move from one country to another, they must make sure they create democratic labour environment where their workers are paid good wages, where the environment is protected and where pension and other social costs are put into consideration whenever they are exporting.

“And also America should stop giving rebates to Chinese exporters. The Chinese have in the next 40 or 50 years to torment the world. Why are they in a hurry? Why rushing to torment the world? America never rushed to torment the world. America carefully played its game. I think China is making a very grave mistake by the speed for which it is overtaking the global economy. I have told the Americans that protectionism is necessary if it is to curtail excesses of making America a dumping market and by so doing, millions and millions of Americans lose their jobs,” Enwebara said.

He also blamed America for running an open economy thus giving the Chinese an easy access to penetrate the American market.

“America went to the level of believing that its currency can become a reserve currency. That is what happens as a result of globalization and the so-called privatisation and deregulation where there is a free market; where there are no checks and balances. So, it is the weaknesses created in the American economy for the past 25 years, because of Reagan revolution, that gave the Chinese the ability to penetrate into America without difficulties. The local economy is too weak to withstand the foreign attacks and the Chinese have taken advantage of that.

“I am not saying that it is their responsibility to help America. It is the responsibility of America to put its house in order.” the expert submitted.

Speaking about the Nigerian economy in relation to the global crisis, he said that for Nigeria it is a wake-up call to diversify its economy wondering how a country like Nigeria would depend on oil as the only resource.

“It is a wake-up call to Nigeria. I have always said it, no country as sophisticated as Nigeria will depend on oil or raw material for its natural resource. It is unbelievable that a country likes ours, after 40 years, is still dependent oil and looking at oil as if its future is dependent on oil. I think Nigeria has got the opportunity and still has the opportunity to enhance the trend. We must diversify this economy. We must industrialise this economy. We must run away from this oil trap because we have all it takes. But our leaders are comfortable.

“Our leaders are sitting down and watching the petrodollar to come and share it. Who will do it? It is high time we started looking inwardly by creating the environment for entrepreneurs and small businesses to grow and create the environment to stop dumping, making Nigeria a dumping ground.

“That is why I have resolved that the foreign reserve should be used to help young entrepreneurs; should be used to create infrastructure to enable foreign investors to come in; should be used to encourage education, science and engineering in schools; should be used to make our hospitals good places for people to go and be treated instead of Nigerians to go overseas to be treated.

“We must industrialise this economy and it takes little or nothing to industrialise the economy. So, long as we do not industrialise the economy we shall continue where we are. To industrialise this economy is simple. Bring people who have what it takes and who have the guts. And the leadership of this country must have the guts to say, we have been wondering in this wilderness for a long time and it is high time we reversed and thought it out. It does not take a magician to industrialise a country.

“It is not a rocket science. If China can do it, why won’t we do it? Let’s stop looking at oil. Let’s look at other things we have in abundance. We have human capital. We have the market that can consume whatever we produce” he said.

He examined the development of stock market in the country and concluded that it is fraught with a lot of secrecy, fraudulent practices and deceit. This, he said, is because Nigerians are not well educated on the issue.

“The stock market in this country has not been well developed because it is held hostage by a group of people and they hold it as their own property because Nigerians are not well educated to understand the complexity of the Nigerian market.. Secrecy becomes the way to run the stock market and a group of people who run it in that way maintain it that way and they take advantage of ignorance of Nigerian citizens.

“Some banks that went to the stock market declare that their return on investment runs into trillions and some of them are saying that their capitalization has become trillions and you can get 50 per cent profit. Some of them were declaring 300 per cent profit as a way to lure ignorant investors. I never invested one dime in any because it is not yet democratic. Until it becomes democratic and people are well informed and there are checks and balances that show that the accounting system is fair and not fraudulent, anybody who is investing in that market is taking a risk.

“A bank can tell you that its profit this year is 300 per cent. On what basis is he basing his economic indices. The economy that grows below 10 per cent and you are having 300 per cent profit, one has to find out whether you are printing naira or you are into importation. Even if you are a trader now importing made-in-China goods and selling in Nigerian market you can’t make 300 per cent profit.

“Moreover, most of them have gone overseas to get foreign funds at cheap rates, sometimes 5 per cent, 3 per cent and they lend to Nigerians at 20, 18,19 per cent. So, there is the need to democratize the banking industry. There is the need to democratize the financial sector as a whole. A lot of fraud is going on there and those who are perpetrating the fraud are thinking that they are too smart to be caught and the system allows them to get away with that.” Enwebara said.

In view of the global economic meltdown, and the unemployment gale in America, the MIT graduate suggested that it is now risky to continue to save the reserve in dollar. For him, the dollar is no longer a reserve currency because the euro is an alternative to dollar. “The dollar is no longer a monopoly currency. So, I think that a nation like Nigeria must diversify its investment so that some part of our foreign reserve must move to euro so that you don’t put all your eggs in one basket.

“Look, we owe no nation anything and no nation owes us anything. Whether Americans are suffering because we removed our money out of it is none of our business because it is none of American business when Nigerians are unemployed. I will advise the government to quickly diversify our foreign reserve. Move 50 per cent of our foreign reserve to euro and possibly move some to Yuan. Take about $20 billion and create sovereign wet fund.

“The government must increase the number of economic team so that there are more economists and help to understand the complexity or even the political economies that we are talking about. The people who are trained as pure economists may not understand the economic game more than pure economists because pure economists are looking for data than lies. There are people who have been gifted that don’t need data but they can read the minds of other nations and can tell you what those nations are thinking about instead of focusing on Adam Smith’s economy,” he said.