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Dele Sobowale: What Govt Won’t Tell You About Coming Recession 1

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“If the highest task of politics is the preservation or continuance of the life of a people…..Its success is the making possible of this preservation. Its failure is destruction [of the life of the people].”

Adolf Hitler, 1899-1945, in HITLER’S SECRET BOOK, p 7.

 The Federal Government, FG, and the Economic Advisory Council, EAC, have not told you the truth and the whole truth about the looming recession. For your own sake and those of your loved ones I beg you to read my submissions. They might save your life. But, first here are reasons why.

 Whatever else might be said about Hitler, one thing must be granted. He turned the German economy around at a time other nations were still mired in the Great Depression of the 1930s. Germany was the first country to come out of the economic debacle of the last century. If you ever owned a Volkswagen beetle, remember this. Hitler made it possible. Until he came, German carmakers targeted the rich. Hitler ordered them to come up with a car for the common man — the “BEETLE”. It just goes to show that even a horrible man might teach us things.  We should  listen to the message – even when we detest the messenger.

I reached for Hitler’s book which had been in my archive for over 40 years on account of the herdsmen menace. I recollected things in it which provide insight into what to expect from Nigeria’s most pervasive terrorists. Suddenly, Coronavirus erupted on the world. Then, I discovered that there were a lot of things to learn about economics from the man most of the world loves to hate.

 The first lesson he emphasised was courage in a time of serious danger when the survival of a nation is at stake and innovative solutions to great problems are urgently needed. We are entering such a period now. And, the danger is real. The recession of 2020 is knocking on our nation’s door. Unlike the mild recession of 2015, this one will be more devastating and its impact on our lives more destructive. Federal Government officials — President, Ministers, Governor of Central Bank etc – will urge Nigerians not to panic; they will attempt to minimise the likely ferocity of attack on our lives. That is their job. That is not mine. Theirs is to minimise the danger. Mine is to tell the whole truth. Yours is to decide who to believe. 

 “A journalist should be pursuing a fair rendition of truth without regard to popular moods; the journalist should not be swayed by public opinion; only by the pursuit of truth, as close as he can get to it.”

Malvin Kalb, US Journalist. VANGUARD BOOK OF QUOTATIONS, p 109.

 Although I am not a journalist, that has been my policy, since writing my first article for VANGUARD on the Business Pages in 1987. It was a Marketing topic and the title was MAGGI IN ROYCO SOUP. Unilever, then called LEVER BROTHERS NIGERIA LIMITED, LBN, had launched a new seasoning, called ROYCO, to challenge NESTLE’s MAGGI – which had a near monopoly. LBN, during the launch, told distributors that ROYCO would within five years have close to 25 per cent of the seasoning market share. I was Marketing Manager for North Brewery, Kano, MBA holder from Boston and majoring in Marketing. I decided to intervene. Mr Akiyode, VANGUARD Editor at the time gave me the opportunity to write that first article for VANGUARD. I cannot thank him enough for taking a chance on me and for making me notorious as well.

 While other commentators agreed that LBN was going to up-end NESTLE, I declared that “ROYCO will be lucky to get 10 per cent in 20 years.” I gave reasons which need not delay us here. LBN, a big advertiser in papers in those days, took strong exception to the article and threatened to withdraw their adverts from VANGUARD. The paper stood firm. I am for ever grateful for the courage to call the bluff of a big client in defense of a first time contributor. And, here we are in 2020. ROYCO is still struggling to get 5 per cent share. That was my first accurate forecast. There have been others since then. Two more will be sufficient to get us going on why I think a great recession is inevitable.

“In times of victory prophets are unnecessary distractions.”

Trevor Roper, VANGUARD BOOK OF QUOTATIONS, VBQ, p 204.

 In 1996, when shares on the Nigerian Stock Exchange were going through the roof, I submitted an article titled THE NSE CRASH OF 1997/98 in which the prediction was made that the market was heading for disaster. Stockbrokers found it so funny they placed it on their Notice Board and laughed each day the Index went up. Then, one day, there was decline; followed by two more days. Then two days of positive results. Suddenly, four straight days of decline occurred. The crash was in progress. VANGUARD’s Correspondent, who had told me about the laughter, reported that “we reached the Exchange one day and saw they had taken down your article. Nobody was willing to claim credit for taking it down. They were too ashamed that a man unknown defeated them.”

 Again in 2008, after Banking Consolidation had become a complete mess, I was the first columnist writing on the Business pages warning investors that another Tsunami was on the way – led by Professor Soludo’s “con-soludo-ted” banks. While others thought they were thriving, I announced that they were in trouble. Even the desperate attempts by Soludo and the Director General, DG, of the Nigerian Stock Exchange, NSE, to persuade investors to hang on to their shares was debunked. History has recorded that against the rosy pictures of recovery painted by the former CBN Governor and DG-NSE Dr Ndidi Onyuike (where is she?), my prediction came true. Read the message in 2008 below.

“Every reader of this column would recall when the DG-NSE ordered that only shares appreciating in value would be announced as a measure to build confidence. I predicted that it would do the reverse. Today, the market has lost about 40% of its value since that announcement and it will lose more before it reaches the bottom.

 Among the measures proposed is the SHARE BUY BACK initiative which is designed to drive up the price of shares by mopping up several billions with cash taken from the accounts of the companies. Since this is a novel idea in the Nigerian capital market, it will require another column to discuss it fully. But, for now, let me give the verdict on that one and present the evidence later. It will not work, for the benefit of most share holders, only the rich will gain and in the end it will still lead to the sort of capital market debacle that America and the rest of the advanced economies are facing at the moment; except that in Nigeria, it will be worse.”

 The Minister of Finance, Planning and Budget announced the following measures, last week, after a National Economic Council meeting: that the FG will not belaying off workers and the bench mark is now $30. Nothing on earth can be further from the truth. They are lying again. They were wrong before and I was right before on many occasions. You will ignore my forecasts and believe Buhari’s government at your own, your family’s and your company’s peril…..

To be continued

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