The Bricklayer’s Explanation To Oil Price Fall, Naira Devaluation & Everything Else By Chuba Ezekwesili

So I logged onto Nigerian Twitter yesterday afternoon and found people abusing economists and financial analysts for speaking in jargons about the CBN’s actions. So for those who’re still confused about what’s going on with Nigeria’s economy and are trying to understand the implications, here’s a simplified version. No bricklayers were insulted in the writing of this post…at least, not explicitly.

So How Did This All Start?

First thing first, oil price fell. Why? Everyone’s increased their production of oil and no one plans on cutting back. In the US, shale oil’s getting cheaper, so there’s more oil out there…and we all know what happens when you have a lot more of a product — price falls. When price falls, consumers are happy and producers are unhappy. Consequently, nations that are consumers of oil have a lovely time, and oil producer countries …a not so lovely time.

So? What Does This Have to Do With the Naira?

Before we go on, a little info on currency and exchange markets. It’s important to note that our currency doesn’t exist in a vacuum. Essentially, a unit of our currency is exchanged for a unit of another currency. Hence the term, Foreign Exchange or Forex or FX, for short. When we buy products from outside Nigeria, we have to exchange our Naira for Dollars. Your Naira is useless outside of Nigeria. It’s why you convert your Naira to Dollars before you travel. You want to test it? Travel to Dubai with only Naira.

Back to the question you raised. Nigeria is fortunate(?) to be an oil producing nation…when oil prices are high. Presently, oil prices are not high and that’s bad for us. Nigeria’s economy is dependent on oil revenue: about 75% of Government revenue comes from our crude oil sales. So when oil prices fall, oil revenue falls too, and that’s bad for the economy.

In the currency market, exchange rates are often centered on the health of a country’s economy. When the economy of a country is strong, its currency is also strong in the foreign exchange market. When the economy appears to be weak, its currency loses value in the currency exchange rate. Nigeria’s dependent on oil, so when oil prices are weak, so our currency loses value in the foreign exchange market. This loss of value of Naira is called a ‘depreciation’ in currency value.

Here’s a simple example. If we began with a dollar exchange for a Naira, both are in a sense equal. However, once I have to give out 2 of my Naira for just 1 of your dollar then the value of Naira has fallen. In the past months, the exchange rate was $1 dollar to roughly N150. Thanks to depreciation and eventually devaluation (we’ll get to that later), it’s now $1 to N168.

Alright. I Get the Currency Part, But What Does Our External Reserves Have to Do with our Naira Value?

To explain this, we’ll have to look into what the External Reserves is and why it exists. Think of your External Reserves as a Savings account where you put some portion of your salary every month. That money gets saved for something later: paying your children’s university fees, buying a house, or importantly, in case things get bad in the future (perhaps you lose your job).

Likewise, countries keep these reserves, but mainly to safeguard the value of their domestic currency, boost their credit worthiness, protect against external shocks and provide a cushion for a rainy day when national revenue plummets. When Nigeria earns revenue from oil, it gets paid in dollars, so we simply stash a portion of the money in our reserves.

Moreover, the reserves of oil producing countries like Nigeria tend to benefit economically from higher oil prices. The higher the price of oil, the more money oil producing countries like Nigeria get to earn and save.

So if We Have an External Reserve, Why’re We Worried?

Well, having a bank account doesn’t mean you have money. We have a reserve, but our money no plenty. Nigeria has been dancing shoki with its reserves. When oil price was high, we apparently weren’t saving that much into our reserves. In fact, our reserves have been on a downward trend for years. We’ve been using our External Reserves to keep the value of Naira stable for months. When our currency appears to be falling, we take out some dollars from our external reserves and purchase Naira. Increased demand for Naira leads to increased value of Naira, and that’s how we stabilize our currency.

However, we sacrifice a portion of our External Reserves to pull this off. For instance, “while the central bank stepped in Nov. 7 to send the Naira to its biggest one-day gain in three years, intervening in the market has reduced foreign reserves to a four-month low of $37.8 billion.” In the last few months, even Russia with their large reserves had to devalue their currency by 23%.

So is This why Everyone Was Making Noise About CBN Devaluing the Naira?

Yes. Now there’s only so much spending from the reserves that the CBN can do, especially given that we’ve really sucked at growing our reserves when oil price was in the $100 range. It’s like when your office was paying you N100k, you were clubbing every weekend rather than saving some money. Then the minute your office decided to increase your income tax, that’s when your jobless relative comes to live with you too. So now, your salary is not only less, it’s burning faster cause there’s an extra mouth to feed.

The drop in oil price does not only send our currency downwards, it also makes it difficult for the CBN to defend our currency. It’s a double whammy. Essentially, if the CBN keeps trying to defend the rate at N150, it’ll burn through the reserves pretty fast and then we’ll be screwed. So relaxing this currency threshold to N168 means they can relax a bit. They don’t have to keep using as much of the reserves to prop up the Naira. If you’re still curious on how it all works, Feyi goes into the intricacies of devaluation in his fantastic post here.

Okayyy! I Think I Understand Now, But How Does This Affect Me?

Like many other economic events, devalution creates winners and losers. Let’s start with the losers. If you generate revenue in Naira and incur costs in dollars, this is a bad time for you. Any activity that has you converting Naira for Dollars will hurt you way more than a few months ago.

Let’s have a moment of silence for our Igbo brother who will be ‘importing containers’ this christmas. Life just got harder for them. Given that importers have to pay for their imported goods in dollars…and dollars just got more expensive, the cost of their goods have increased overnight.

Same thing happens to those tush parents who’ve got their kids in Nigerian schools that only accept their fees in dollars or Nigerians that have children schooling abroad. If you like flying, shopping or doing anything abroad, your cost of doing so has risen. On the contrary, if you earn in dollars and pay in Naira, life is looking pretty good at the moment.

Exporters also benefit. The fall in value of Naira means more exports because our exports have gotten cheaper. But ermm…what exactly are we exporting?

Phew. So It Doesn’t Affect Me Like That

Don’t be so sure. Nigeria’s an import-dependent nation, which means that most of what you purchase is produced abroad. I heard we import our toothpick too. If the prices of imports have risen, trust your Nigerian brothers and sisters to increase their prices too…leading to what’s popularly known as inflation.

I Was Hearing All These Oversabies Saying CRR, MPR. What Does This Mean?

CRR stands for Cash Reserve Ratio. It’s the proportion of what a bank can lend, to what it has in its coffers. So if the bank has N1000 and its ratio is 50%, can only use 50% of that money (N500) for business. Given that awon banks do not mess around with profit making, they will make sure that N500 brings back maximum profit. Banks are like the servant in Jesus’ parable that got 10 talents from his master, not the lazy one that got 1 talent. So to make max profit off the N500, they will raise interest rate if you want to borrow their money.

MPR stands for Monetary Policy Rate.The Central Bank uses the MPR to control base interest rate. The higher the rate, the less money in circulation. How? If interest rate is higher, will you borrow money from the bank knowing that you’ll pay much more later on? Nope. Instead, you’ll take your money from your pocket and give it to the bank, so they’ll make you more money.

Remember that thanks to devaluation, awon boys will be increasing prices left and right. General price increase in a given period leads to inflation. To tackle this, CBN increases CRR and MPR to reduce demand for money. This way, they prevent inflationary rise.

Okayy. I think I Understand That Part, So What’s This Austerity Thing Aunt Ngozi was Talking About?

That one is another long story. So, we’ve all been in situations when we’re broke. Ok, maybe just some of us. We adjust our lifestyle around the middle of the month when our salary hasn’t been paid. You go from eating jollof rice to drinking garri. When friends tell you to come out and party, you form ‘I’m very busy’.

Nigeria’s proposed austerity measures are similar…except on a grander scale. To cushion the effect of the falling crude oil prices, we have to cut back on spending and quite literally tighten our belts. The Government is cutting back on wastage (less government traveling and all that sort). The Government’s also raising taxes on luxury goods such as private jets, yachts and champagne. Somewhere in this luxury tax is the amusing observation that the revenue from taxes on the rich will still go back to the rich.

For the proletariat, the sweet subsidy you enjoy when you fuel your car will also get cut. Prepare to pay more for fuel. This is a good thing. Subsidy has to go anyways.

Wow. That was Long. So, Any Lesson to Learn from All This?

Yes. First lesson: Nigeria is the most reactive and least proactive nation you could’ve been born into. This isn’t the first time oil prices have fallen. Government should’ve gotten used to fluctuating oil price and prepared accordingly. And, since oil is the figurative oil in Nigeria’s economic engine, judicious and prudent management of oil revenue should’ve been practiced. However, we largely mismanaged our wealth during the time of booms and we’re now trying to behave ourselves in the time of slump. Let’s see how that goes.

The second lesson to be learnt is that we should’ve diversified our economic sources of revenue a long time ago to prevent price shock of primary products from affecting us drastically. Also, State Governments should’ve been pressured to increase their internally generated revenue much sooner. We can’t keep reacting to every economic shock that hits us.

Anyways, this is getting too long and no one probably got to the end, so no need for a witty or wise ending. But, if you reached this point, congrats! After spending all that time reading this, make sure you show off your new macroeconomic knowledge to your friends. And please, stop abusing econ-nerds. We have feelings too. Selah.


How To Survive “A Bed Of Snakes”

“Once upon a time in a far away kingdom called earth, there lived a special group of people called human beings.

They were mostly two-legged.
They were born male and female.
They were born free.
They were supposed to all be equal.

But they came in varying colors, sizes, shapes, strengths and awareness.
But they were each beautiful, after their kind.

Also living in this convoluted kingdom were animals.

And snakes.

And a snake was he/she/it that tempted the woman in the garden of Eden blah…blah…blah…

And thus begat the birth of the fear of snakes.

And there was one who found himself  in bed with a snake. Yet another in a den, attacked by a couple of snakes…

They fought and won. Some were lost to the snakes. Over years, stories of their battles were handed down to the son’s. In the manner of commandments.”

1) Thou shalt do nothing

Keep perfectly still. Do not move. Pay rapt attention to the said snake. Observe it keenly. Is it long? Is it short? Does it rattle? Does it hiss? Does it stand up? Is it coiled? Color? Distinctive markings? Study your snake objectively. Your life may depend on these details later.

2) Thou shalt not fear

Say no to ophidiophobia.

When we are afraid, we secrete adrenaline. Animals can sense this. Its like perfume to them. They zero in on your panic. It encourages them. Steady yourself… Strengthen yourself with reasons why you must survive this. Anger. Love waiting at home. The injustice or unfairness of your present predicament… Anything! Even when afraid, hide it!

3) Thou shalt become as a snake

“When in Rome…”

A portion of Neuro-linguistic programming (NLP) teaches of the behavioral psychology of mirroring your counterpart… This attitude will throw your snake off balance.
Embrace the moment. Think like the snake. Is it hungry? Is it a snake protecting its young? Is it ill tempered?
You are in survival mode. What would your type of snake do? What is the snake aiming to do? Will it constrict you? Is it venomous?
Become like it.

4) Thou shalt observe thine arena

Your predicament typically contains the key to your salvation. A bigger, carnivorous snake? A weapon? A mongoose? Allies? At least an exit point? Open your eyes to opportunities of salvation.

5) Thou shalt fight to kill

Sadly, most situations like this culminate in the demise of the prey. Primarily because they eschewed the preceding commandments.
If you fight for your right to life; for your right to existence with your spirit, soul, heart, body and might, two outcomes are inevitable:-

a) you will be victorious-

Either because you slaughter them or they flee because you are no pushover.
My personal code of ethics is to pursue the snake, overtake it, and expeditiously dispatch it to snake-afterlife. I firmly believe that “the snake that fights and runs away, will return to f#@k you up!”

b) you will not be victorious-

Ah…well…(damn!) At least you went down fighting.
Leave scars on them though. Leave injuries so grievous, they may not survive.
Or wounds that would maim them for life. Or at least make it easier for your family to avenge you.
Make a mess! Do not go out like a sissy.

6) Thou shalt crush its head with thine heel; sever the head

Show no mercy.
Even its death throes are dangerous.

“Cut off the head and the body dies”

Its a good example in any case.
Your coldblooded decapitation will resound throughout reptile-dom.

7) Thou shalt propagate these commandments

What you (really) pay for, is ignorance.

Spread the word. Watch out for snakes! These are the steps to victory. Snakes abound. There are usually many more ahead.

“But snakes intrigued some humans.

They studied them.
Some even liked them.

Yet some, by error of omission or of  commission began exhibiting characteristics of snakes.

They would stalk fellow humans as though prey.

They are among us.”

And the (enlightened) humans lived happily ever after…

Or, so they thought.

Uyai (Beauty)


“Flee the fisherman!
He hurts,
With barbed hooks
Mesh-y nets…

Behold the jeweller
He beautifies,
I see beauty in you
My masterpiece…

You do not know me
But you want to.
But I terrify you
And so you flee…

When I touch you
It will be with awe.
When I take you
It will be with honor.
When I hurt you
It will be in error.”


How To Keep Your Man

It is quite easy to get a man. How to keep him though? A challenge for most women.

What to do?
How to do it?
When to do it?
Where to do it?

Enter Betty (real name withheld of course!)

She is one of the hottest women I know. She is gorgeous!

Beautiful. Intelligent. Ambitious. Articulate. Excellent voice. Warm. Real. Laughs from a good, healthy place.

A sexy bombshell.

I have known her for a little over six years now. She is a very close and dear friend. A kindred spirit. My muse of sorts.

In all these (six) years, she has consistently maintained a torrid relationship.

Against the craziest odds.
These odds include taboo, tradition, morality, common sense… amongst a few.
If their relationship were to be made public, lives would be ruined.
I kid you not, human blood will be shed.
Yet, they (discreetly) remain devoted to each other.

We talk a lot. And a few days ago I asked her what the secret of her successful relationship was.
We spoke on phone for almost half an hour on this subject… I took down eight pointers.

On a scale of ’10’, by whatever rational standard, the woman in question would be rated (at the very least) ‘8.5’.

She is truly ‘all that’.

A lot of men think so too. She is most men’s ‘spec’.

She is a socialite, extroverted, charismatic and popular.

So, if she bothers to speak, ladies, I suggest you listen.

In her words…

1) Like each other: do you know it is possible to love someone, yet not like them? Like an obnoxious sibling. Or a wayward child. Or a difficult parent? You have to be with a man you like. Not love (yet). That may develop. But you must like him.

2) Don’t plan: be spontaneous as often as possible. As regards sex, holidays, adventures, outings… Live a little! Just do it! Just do stuff. Be free. Live free and child-like with him. Be that fun-to-be-with girl that you were. Before the issues of life regimented your liberty.

3) Don’t be uptight spiritually:


My dad recently started reading my blog. I was raised Baptist.
A couple of spiritual brethren look in from time to time too.
I will be vilified, possibly chastised to an early grave if I dare relate her exact sentiments here.
Pressure me one on one and I’ll tell you…my sincere apologies.

4) Look good: your man is moved by what he sees. He is turned on visually. Your appearance matters. Do not dress like a slut. Don’t ever make him ashamed of being seen with you in public. Think along the extreme dress-themes of the movie “Pretty Woman”. Dress up to make him proud; and you, looking classy. Leave the sluttiness and naughtiness for his eyes only.

5) Read books: broaden your mind. Hooking your man is not the ultimate goal. Keeping him eternally seduced and besotted is. Conversation is key. The best conversations come from an enlightened mind. Don’t be dull. Don’t be naive. Study to show yourself approved.

6) Watch his movies with him: (she said it just like that…curtly. Her tone of voice discouraged any contrary opinion).

7) Pray for him: And above all; pray. Spiritual births the physical. If you pray for the best for him, he will know. Not because he heard you pray, or because you told him. A bond occurs. Your union will be strengthened.

8) Don’t snoop around: stop that nonsense. Have faith.
Leave his phones, wardrobe, wallet, bags, laptop, iPad, etc alone.
Let him let you in. Men are territorial. Force yourself in, and you’d end up:-

a) Vomited.

B) Causing him constipation, and ultimately purged of.

The Submissive

Shut up! Do not presume to oppose
I am your chairman, your dominus.
Lay back; no, pose
You are, only as I choose.

Spread them wide.
Keep it shut.
Touch. Caress. Do as I bid.
Yes baby, just like that.

I will gag, I will spank
I will choke, I will blindfold
I will soothe, I will thank
I will pamper. I will be cold.

You belong to me
I will not be challenged.
Trust me and see,
Pleasure, glory…unparalleled.

You are mine!
To use and to abuse.
You are my queen,
To whom my all accrues.

“Domestic Violence”

How is Nathan?” I finally asked.

She froze. And then purposefully drove her table knife into her (uneaten) steak.

“I’m leaving him.” She finally answered. “Its all too much, the abuse, the disrespect… He almost hit me the other day!”

I looked long and hard at my childhood (married with kids) friend. Really looked…in between the lines…till I saw.

I leaned forward, took her tiny hands in mine, and began to talk…

“Domestic Violence; (also domestic abuse, battering, family violence and intimate partner violence) is a pattern of behavior which involves violence or other abuse by one person against another in a domestic context, such as marriage or cohabitation.”

“Domestic Violence or aggressive behavior within the home, typically involving the violent abuse of a spouse or partner.”

“Psychological abuse, also referred to as emotional abuse, is a form of abuse characterized by a person subjecting or exposing another to behavior that may result in psychological trauma, including anxiety, chronic depression, or posttraumatic stress disorder.”

Wikipedia. 2014.

I have researched long and hard on the subject of domestic violence. And I am shocked at the depth and width of its definition.

I was also appalled at the statistics. The frequency of occurrence is mind-boggling. These just being the reported cases.

Stay with me on this, I am headed somewhere.

What is wrong with us as people?
What is wrong with love?
Where is God, and the long arm of the law in all these?

I have to ask because it would seem like the greatest atrocities are committed under the auspices of love and religion.
The law it seems, is always reactive.

I have set out to understand what domestic violence is truly about;
In truth, anything you do, or say to your partner can be deemed abusive. Depending on their age, religion, ethnicity, social class, experiences et al.

The subject is vast and libraries are inundated with hard facts on the issue (as they perceive it). But I have a fresh take on domestic violence:-

Our generation has become soft.

Too soft.

Yes I said it!

It had to be said!!

We all, have become soft and fruity.

Our ‘men’ have increasingly become effeminate and childish. A recent survey placed the age of the average male gamer at 31!
A 31 year old Xbox/PlayStation/… player.
Hmmm…I have nothing against gamers or video games.
At age 31 though…I just hope you have a job and your life on track sir.
These men, probably still live with their parents.
I may be off by a few years, but about twenty years ago, the average 31-year old man would have been married about seven years and sired a decent number of kids in his own home.

Our women are also proving inept at anything domestic apart from sex. And even at sex…
They are immature too. “28 going on 18”.

We have gone soft because we are over-pampered and thus, spoilt.

The men and women of grit, substance, style and grace amongst us are very few.

Baby boomers…

Here’s my point:-

There are too many cases of “domestic violence” to be true.
The signs and descriptions of “domestic violence” are too all- encompassing.
Most times, mere protracted, domestic personality clashes are deemed abusive by clearly stubborn and unreasonable partners.
There are clear cases of domestic violence. But I think the term in itself has suffered abuse too. It is used too loosely to cater for our fragile self esteem issues. It has become an excuse for a weakened caliber of this generations’ adults.

We need to grow up. Toughen up. To step up and play our parts in relationships.

Playing the “domestic violence”/”emotional abuse”/”psychological abuse” card(s) every time there is a clash of purpose and/or misunderstanding is escapist.
If you and your partner disagree on issues…guess what? It is no big deal. It is because we are stubborn, selfish and obstinate that we get unhappy; and remain that way.
Invariably, psychological trauma develops. Which is usually the prequel to physical violence.

Again, I reiterate that there exist real cases of domestic violence. Please, male or female sufferer, run!

Most abusers are cowards. If we had not all become so soft, we would stand up for our selves and for our rights.

I have never been abused.
I would simply punch your lights out (I do not hit women. I’m talking about bullies mummy).
And I go out of my way to project my ability to do so.

Try the soft, fruity human next door.

Respect is earned! It is not a freebie.

Her hug had a tinge of finality to it.
As she walked away, I felt sad.
I don’t think she will be calling me up to chat anytime soon. I’ve known her for decades. She is spoilt and wears her heart on her sleeve.
Nathan had simply stood his ground for once.
But truth hurts I guess.

Oh Phoebe!