Hypocrisy of Free Floating Currencies in Liberalized Markets
Farouk Martins Aresa
Watch the steps China is taking right now to curb the free flow of capital and cash out of the country in order to firm up its currency. They have limited the amount foreign and local investors can take out. Extra justifications and bureaucracy are required for foreign medical treatment, loans or student fees and profit repatriation. Foreign economists and their African cronies whose countries drained Africa dry have heavily criticized each of these steps in Africa!
We have to admire China on their currency control or manipulation to favor their market and industry. Their trading partners claimed they intentionally devalued their currency so that their exports can cheaply compete outside. Right now China has seized the control of its currency so that it can appreciate against the United States dollar. Indeed, trading partners are so confused; some are still talking about weak renminbi, not realizing China has moved to defending it.
African countries in general, Nigeria and Ghana in particular were opined on devalued currency when they have no finished products to export into foreign markets except raw materials that are already sold cheaply in exchanged for expensive finished goods. In most cases the same raw material in gold, diamond, oil or even fish are wrapped up in glittering packages or cans, polished and exported back to Africa. In the case of China, they export their finished products.
During our lifetime, China had famine and conquered it. In order to control their population, they instituted controversial method of birth control of one family and one child. They have been able to relax that policy because they can now feed themselves. It shows that before a country can take control of its destiny, they have to be able to feed themselves first. If you could not feed yourselves, you are subjected to blackmail and control by your feeders.
We have seen currencies of other countries depreciate and appreciate but not in Africa where our currencies have only gone one way: down. Western countries that continue to preach the advantages of depreciation to African countries so that they can buy our resources and raw materials cheap, cry murder when China depreciated its currency. Instead of Africans trying to find out the reasons for their double standard, we joined them working to our disadvantages.
There are local and foreign trained economists that have been crying themselves hoarse trying to convey the same message President Trump got elected on in United States, simply put: Buy Africa! If nationalism is good for the most capitalistic country in the world, it cannot be that bad for African countries. Of course, markets are rigged as regulators imposed over $204B fines.
African economists with colo-mentality insist on free-floating currency and liberalized market as the only way to move our economy forward because it attracts foreign investments. We do not argue against foreign investment. We actually want foreign investment, what we guide against are predatory investors that have no interest in long term infrastructure but temporarily park foreign pension funds and edge funds in stock market that has never added value to economy.
Oh yes they have criticized China too but how effective are they in shaping China’s policy? You should watch how Nigerians almost turn to fist fight on the streets about devaluation and how industries that use water and sugar to make beverages blackmailed Government on why they could not continue production and must lay off workers because they could not import their “materials” and machineries (that can be made locally) from abroad!
We are talking about manufacturers that have been in these countries for almost a century but still importing “ingredients” and workers into Africa when most of what are needed are right in front of their noses locally. Even local bread makers grumbled about cassava in bread. After wheat bread content has been reduced, prices still went up so that they can import even more wheat to satisfy the taste of the consumer that do not like their local cassava in bread!
The way your feeders control you is to change your taste from local food that you grow to their food that you have to import or that they command you to grow. African addiction to foreign food is not by accident; it is by plan and design. When they train our taste buds, they can leave us and we will train our children’s taste buds. The initially trainers of our taste buds do not have to be there. We perpetuate and transfer foreign taste and preferences to the next generation.
Unfortunately, one generation refused to learn from the mistakes of the previous generation. Many of us remember “Structural Adjustment” and how it impoverished our middleclass professionals including our teachers and professors that never had the opportunity to build their own houses or buy another foreign made car since we never had local car production. Even if we had local production in anything, it has never been cheaper than foreign made.
IMF and World Bank admitted at the International Conference in Ghana that implementation of it was wrong. Yet they come back with the same principle of devaluation of our currencies to get us into Promised Land of economic sufficiency. When these economists, supported by local cronies keep on selling us dummy principles and we keep on buying their brands, we cannot keep on blaming them. The fault is ours. The awareness today for frivolous consumption is higher than it used to be but we still need to turn it into action in terms of local production.
The idea that we can sell enough raw materials to buy back finished products of the same raw material is incomprehensible if not stupid on its face. Yet this is what Africans have been encouraged to do and known to do for centuries. When we talk about toothpicks and pencils importation, it looks like trying to trivialize issues to justify out prejudice against foreign goods that are locally available. But it point to a deep-rooted bias against home production. We must learn how to appreciate Ijebu- and Okrika-made goods.
Sometimes we want to believe that one has to be on drugs to be so induced. If you think opium was foreign gadgets like mirrors to our grandfathers, Bread and Wine of Jesus or the favorite food of Muhammad is Sunnah: these are spells on which Africans are mesmerized, you may be right. No wonder Okonkwo (of Things Fall Apart) took his horn to Church to receive wine!