“DR CARDOSO AND HIS ‘SMOKE AND MIRRORS’ FOREX STRATEGY – All Hail Dr. Cardoso, The New Mafia Don in the Forex Gang War”

It’s has been very curious watching the rate of exchange of Naira to the Dollar go down precipitously EVERY WEEK in the last 6 weeks. This is a record and Don Cardoso must be given the credit for the Guinness book of records fear but those of us in Fadeyi hesitate to give him any flowers because so far we have received no dividends from his weird manipulations of the exchange rate. We don’t travel to london on air peace or virgin and we don’t buy dollars from any black market. Yet the prices of boli, agbado , rice, beans and dodo that we and our children need to survival continues to go up alarmingly even as Don Cardoso and the Economic saboteurs and govt mismanagers continue to fight their war

We don’t want to die in their war. We just want lower prices of goods and services for the common man! When the falling forex prices finally start to translate to lower prices on the streets of Fadeyi then we shall give Don Cardoso and his twin brother Wale Edu their full flowers and publicly too .

While the supporters of the Ikoyi economists have been jubilating about the falling prices of naira to dollars because that’s what concerned them some of us focusing on the net effect of all the motions haven’t even publicly congratulated the Economic Management Siamese twins—(or is it triplets now, with Dr. Cardoso, Chief Wale Edun, and Dr. Tope Fasua, the special adviser on economy?), and probably would not do so until the end of June, if this holds up, though I am personally tempted to praise him right now.

This is because I see the downturn in forex rates from Naira to Dollars as artificial and manipulated with no fundamentals backing it up … and he still has not fixed the real issues the Fadeyi way – Hoarders are still winning and the govt is not dealing with them! Govt has refused to do Vawolence the Fadeyi way but expect the Nigeeian economy overlords who have been feeding fat on the tears of Nigerians to cooperate with them?

Otherwise how can forex rates be going down but prices of essential goods and services keep escalating? Something is definitely out of wack here and we can feel it

These Ikoyi boys still don’t get it in my opinion though they are really really working hard. Prices of forex have gone down form a high of N1,854 to $1 to N1,000 to $1  but Mama Rachel is still weeping for her children because they still can’t find affordable food to eat! Prices of foodstuff have risen by 40% even as forex rates have gone down by 49%. How can that be if the forex crash is not being artificially induced without any fundamentals backing it .

Smoke everywhere but no fire!

In my own admittedly non-economist Fadeyi view, it’s all a ‘smoke and mirrors’ strategy by the Forex Don, Dr. Cardoso, to wrest control of the Forex Streets from the organized mafia that were controlling it without the government really addressing the real issues of rising prices for the common man. Facts is Those who have held our economy in stranglehold won’t let up until Govt directs some Fadeyi ‘Vawolence’ at them

We want to see if this amazing downward trend of about 40% lower in exchange rate from naira to dollar from an all-time high in less than 30 days will survive the next 60 days before I will be willing to give them their full flowers publicly and on video too, especially having been a harsh critic of their money management policies. I would have no problems doing that.

Meanwhile, *I personally see nothing to support this drastic crash in dollars for naira rates in the last 4 weeks, just like I saw nothing to support the drastic rise in exchange from dollars to Naira that happened before it too*. The idea that we can put something on nothing is what gave rise to my viral article on the differences in the Ikoyi vs. Fadeyi approach to artificial scarcity that I propounded in the first place.

The truth of the matter is, what we are seeing now is ‘smoke and mirrors’ economic management. We see lots of action and motion but not much forward movement, at least so far for the real people living on the streets of Fadeyi. Prices of goods and services continued to RISE even as the exchange rates for naira to dollars continued to crash and fall by over 40% from an all-time high, making it clear this whole upwards or downwards forex thing is really being manipulated. It’s nothing but a street war in the forex jungle with the regular people of Nigeria caught in the middle. Regardless of who appears to be winning, the Nigerian people keep losing in their local markets or cannot catch a break in daily survival needs!

First, dollar to naira rates sprang dramatically upwards from September to February by the actions of unscrupulous bankers and carpetbaggers, and then in the last 30 days from March to April, it has been artificially manipulated to go the other way by sneaky government bureaucrats who are ‘rigging’ the forex bidding and making it look like the crashing Naira to dollar rate is a natural marketplace action or their politics. It’s NOT.

After all, prices of foodstuff and services kept going up, proving that the forex exchange upheaval is not the real issue that our economic managers should be focusing most of their time on.

Here are some examples from a direct poll I did on my WhatsApp groups about prices of foodstuffs and essential items the regular man needs for daily survival: ALL THESE PRICES KEPT GOING UP DESPITE THE CRASHING EXCHANGE RATES 🤷🏿‍♂️🤷🏿‍♂️🤷🏿‍♂️

– A Kilo of chicken in February was N2000. Today on April 12, it’s N6000. That’s a 3X increase when the exchange rate was improving.

– As of April 12, a crate of eggs is N4000 from its usual N1300-1500 depending on size.

– A pack of table water (12 bottles) in February retailing at N800 is now retailed at N1700.

– Fuel price is now N655 in my area in Okota. It was N450 in February.

– An apple was N300 in February but is now N500. I don’t eat apple but I bought it for my boss.

– A pint size of yellow garri was N2000 in February but now is N2,600.

Yet the so-called rising forex rates that everyone claimed was causing it had been going down drastically in the last four weeks with about 40% as of April 12th.

All we have done is exchange one Don in the Mafia Forex fight for another. Dr. Cardoso may be running things on the streets of Forex now as the undisputed Don, but the truth is our condition of living as Nigerians has not improved.

In fact, for anyone paying attention to the Forex Windows in the last 30 days, The Central Bank of Nigeria (CBN) has been essentially ‘manipulating’ the bidding system to artificially force down the price of dollars.

With the near genius fix that Dr. Cardoso has put in, the government can take this dollar to Naira exchange rate all the way down to N500 to $1 if they want, even without any increase in local production or increase in forex earnings by the government. That’s how sneaky good it is. Why? Because they are determining what the rate would be each week regardless of supply and demand today!

See, this is what Don Cardoso and his posse are doing: They make banks and BDCs bid for forex weekly. After bidding, but before giving them access to the dollars they have bid for, they announce to the public the rate at which they are giving them the dollars to naira.

Then, the next week, just a few days after releasing the money from last week, they will announce that they are giving dollars this new week at LOWER rates of N to $ than they gave them last week, even before the BDCs and banks have sold the ones they got last week from them at higher prices.

Now, the banks and BDCs are forced to sell at a LOSS this week, the dollars they bought last week at a higher rate from the same CBN (after all, if CBN announced last week that they were giving dollars at N1,300 to $1, and then announced this week that they are giving it to banks and BDCs at N1,200 to $1, then rates must go down since who would want to buy at the old higher rate when they know you just got new stock at a lower rate?).

So the CBN keeps forcing the naira to dollar rate down artificially, every week, and not by market forces of supply and demand, since the amount of dollars in the banking sector or CBN system did NOT increase, and local production did not increase to earn us more dollars. In other words, it’s all artificial, and that’s why prices of foodstuff and most products kept going up despite the crashing exchange rates. There is nothing to back the crashing of the dollar rates to naira other than the black market increasing its supply from the coffers of the gangsters on the other side of the forex street fight. How long they can keep it up remains to be seen.

It’s all smoke and mirrors. Lots of motion but no forward movement on what really mattered to the real people on the streets of Fadeyi: the price of garri, rice, and yam in their local markets or Mama Kudi and Aunty Binta’s store. Those prices kept going up, seemingly inelastic to the dropping forex rates.

The only difference now is the banks and other unscrupulous Nigerians were the gangsters before, manipulating the exchange rates, but now Don Cardoso and his boys are the new Mafia playing the same game in the other direction with the poor people from Fadeyi to Abakpa-Nike in Enugu caught in the middle: Prices of foodstuffs just kept going up!

Plus, for the CBN Mafia to make its forced downward trend hold, they stepped up to rigidly monitor the BDCs so they can’t sell to importers and many people who need dollars but can’t handle the extensive documentation the CBN now rigorously require must be submitted and inspected before they can deal.

So, importers applying through banks can’t get all they want since the CBN is also rigidly monitoring them for documentation and not allocating to them all they need. Even BDCs are only given a fraction of dollars applied for.

So, the only place that is unregulated now is the black market where people can buy and sell dollars for anything without any documentation.

Surprisingly, again proving that the Nigerian economy does not respond to normal economic policies, the exchange rates at the black market actually started going down instead of up! What? Yes, black market rates went down below BDC rates and below bank rates.

Who could ever imagine that? It’s perplexing. All Keynesian and Malthusian economic principles in the mud!

It took me talking to some senior bankers and multiple BDC owners to figure out why the black market rate is going down lower than bank rates.

With the understanding that every week the CBN is going to announce a lower rate regardless of market forces, those who have been hoarding dollars, or stockpiled stolen dollars, are rushing them to the black market to sell at a lower rate, to avoid losing even more as the CBN artificially crashes the rate through its weekly bidding windows. So, within 4 weeks, we now get the lowest exchange rates in the black market and the highest rates of Naira to Dollar at the banks (a complete reversal of the order of things).

Somebody give a big high 5 to Dr. Cardoso, the new sheriff in the forex jungle…🙌🙌🙌 although his smoke and mirrors move only changed the oppressor, not the lot of the regular people who still have to buy stuff at increasing rates.

To be clear, I am not saying this development is a bad thing, but how long will it last without an explosion in local production and forex earnings? I don’t know. Nigeria is a weird place. Who is to say it won’t last for years? 🤷🏿‍♂️

Nevertheless, my own projection is, sooner or later, black market dollars will run out (hoarders from years ago and government thieves who don’t mind selling at low rates since they didn’t work for the money cannot sustain the economy long-term). Unless the government is using this Don Cardoso Strategy to buy time until the local production explosion and forex earnings of the government increase, in which case they win long-term, and I pray for that too.

For all it’s worth, I think it is fascinating what Don Cardoso has accomplished, and it’s not wrong for those who want to give him his flowers now to do so, but it’s still a lot of action with no movement in what really matters: the price of goods and services in the marketplace, which keeps going up.

Again, think about it: The dollar is falling, but prices of foodstuffs keep rising!

Cardoso has done has successfully reversed the process where the black market is now where you get the lowest rate, then BDC second, and bank rates are the highest—but none of it has mattered to Mama Lati and Mama Ngozi or Yakubu in the marketplace. They all continued to see sharply RISING PRICES even as Forex Rates CONTINUED TO FALL!

*My name is Ope Banwo*, the Mayor of Fadeyi, and I say those of us in Fadeyi remain unimpressed with the Forex Gang Wars, regardless of who is winning. We need prices of garri, rice, and plantain to go down!