By Yusuf Ozi-Usman
While the end users of the economy like me were thrown off balance and the financial experts are putting their thoughts together on how to handle the situation, the deputy governor of the same CBN, Dr. Joseph Nnanna countered that CBN did not devalued naira but merely announced a new exchange rate in compliance with market forces.
“The CBN,” Nnanna said “did not devalue the naira so to speak; it only followed the three principal markets in Nigeria – the official, the retail and the parallel.”
According to him, the policy will elapse with the current positive transformation in the agricultural sector which would make it possible for products to be exported to bring more foreign exchange to the country.
“We better do it now than later when we will have import control, which would bring about commodity, crisis…Nigerians are always in a hurry. Let us give CBN time to pursue a policy that will be a blessing to all of us. I commend the CBN for being proactive with the policy.”
No matter the amount of high level technical grammar the CBN managers would use to bamboozle the rest of us, the simple fact is that they have knowingly reduced Naira to waste paper, the cumulative effect of which is the untoward inflation looming menacingly in the background.
Common sense would show that CBN has simply given official stamp to the free fall of Naira, which began in the first week of November. As a matter of fact, the CBN action has a semblance of conspiracy with probably internal and external forces to shoot down Naira.
Placing Dollar over and above Naira, whatever name the CBN would like to give it, is an act bereft of patriotism, and for the CBN governor to say that it would strengthen the economy is tantamount to standing logic on its head. Lowering the value of Naira against the Dollar will only weaken the Naira and not strengthen it.
Indeed, it has never been heard anywhere in the world that the official monitory regulator would knowingly make local currency to be subservient to any foreign one, no matter the circumstance prevailing at any given time.
It actually wreaks of economic illiteracy or sabotage or both, from the point of view of simple economic analysis, for the CBN, as espoused by Dr. Nnanna, to subject the nation’s economy to future “possibilities.” For Dr. Nnanna to hang the decision of the apex bank on the expected growth in agricultural sector is carrying the joke too far.
When the CBN decided to increase the Monetary Policy Rate by 100, it sought to throw the essential service banks, such as Bank of Industry, Cooperative Bank, the Agricultural Bank, etc. into confusion.
A trend in the Nigeria’s economy that has continued to play out whenever these kind of “shock” measures are enunciated is the high cost of production and, consequently, astronomical rise in essential commodities and goods that are patronized mainly by the people at the lower rung of the ladder.
As the Presidential Aspirant on the platform of All Progressives Congress (APC), Atiku Abubakar said, the continued volatility of the Naira can only spell disaster for the economy.
With the Naira trading outside the new band, all Nigerians will suffer the consequences, even as Small and medium businesses which have been starved of funds will now have even more difficulties accessing funds which will lead to less revenues for businesses. Less revenue means less potential for job creation. Businesses may now have to cut jobs to balance their books.
The CBN that is obviously leading Nigeria into the economic darkness should return to the drawing back, reverse these suicidal policies and think of something positive before it is too late.
One of such positive alternatives to the proposed obnoxious measures is the increase in the lending to essential service banks, and reducing the interest rates. The CBN can really do better than the frightening and hopeless steps it has taken.
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| Yusuf Ozi-Usman |
Faced with economic crisis, the Central Bank of Nigeria (CBN) appears to
be leading Nigeria down the economic precipice, with it’s strange
devaluation of Nigeria’s currency, the Naira, against the US Dollar.
CBN Governor, Godwin Emefiele, who spoke to newsmen after a meeting of
the Monetary Policy Committee on Tuesday, announced that Naira has been
devalued by N13.
He said that the Naira devaluation is part of efforts to strengthen the nation’s economy, adding that under the new arrangement, the Naira would now exchange for N168 instead of the old official rate of N155 to one US dollar.
He said that the Naira devaluation is part of efforts to strengthen the nation’s economy, adding that under the new arrangement, the Naira would now exchange for N168 instead of the old official rate of N155 to one US dollar.
While the end users of the economy like me were thrown off balance and the financial experts are putting their thoughts together on how to handle the situation, the deputy governor of the same CBN, Dr. Joseph Nnanna countered that CBN did not devalued naira but merely announced a new exchange rate in compliance with market forces.
“The CBN,” Nnanna said “did not devalue the naira so to speak; it only followed the three principal markets in Nigeria – the official, the retail and the parallel.”
According to him, the policy will elapse with the current positive transformation in the agricultural sector which would make it possible for products to be exported to bring more foreign exchange to the country.
“We better do it now than later when we will have import control, which would bring about commodity, crisis…Nigerians are always in a hurry. Let us give CBN time to pursue a policy that will be a blessing to all of us. I commend the CBN for being proactive with the policy.”
No matter the amount of high level technical grammar the CBN managers would use to bamboozle the rest of us, the simple fact is that they have knowingly reduced Naira to waste paper, the cumulative effect of which is the untoward inflation looming menacingly in the background.
Common sense would show that CBN has simply given official stamp to the free fall of Naira, which began in the first week of November. As a matter of fact, the CBN action has a semblance of conspiracy with probably internal and external forces to shoot down Naira.
Placing Dollar over and above Naira, whatever name the CBN would like to give it, is an act bereft of patriotism, and for the CBN governor to say that it would strengthen the economy is tantamount to standing logic on its head. Lowering the value of Naira against the Dollar will only weaken the Naira and not strengthen it.
Indeed, it has never been heard anywhere in the world that the official monitory regulator would knowingly make local currency to be subservient to any foreign one, no matter the circumstance prevailing at any given time.
It actually wreaks of economic illiteracy or sabotage or both, from the point of view of simple economic analysis, for the CBN, as espoused by Dr. Nnanna, to subject the nation’s economy to future “possibilities.” For Dr. Nnanna to hang the decision of the apex bank on the expected growth in agricultural sector is carrying the joke too far.
When the CBN decided to increase the Monetary Policy Rate by 100, it sought to throw the essential service banks, such as Bank of Industry, Cooperative Bank, the Agricultural Bank, etc. into confusion.
A trend in the Nigeria’s economy that has continued to play out whenever these kind of “shock” measures are enunciated is the high cost of production and, consequently, astronomical rise in essential commodities and goods that are patronized mainly by the people at the lower rung of the ladder.
As the Presidential Aspirant on the platform of All Progressives Congress (APC), Atiku Abubakar said, the continued volatility of the Naira can only spell disaster for the economy.
With the Naira trading outside the new band, all Nigerians will suffer the consequences, even as Small and medium businesses which have been starved of funds will now have even more difficulties accessing funds which will lead to less revenues for businesses. Less revenue means less potential for job creation. Businesses may now have to cut jobs to balance their books.
The CBN that is obviously leading Nigeria into the economic darkness should return to the drawing back, reverse these suicidal policies and think of something positive before it is too late.
One of such positive alternatives to the proposed obnoxious measures is the increase in the lending to essential service banks, and reducing the interest rates. The CBN can really do better than the frightening and hopeless steps it has taken.
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