A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has criticized the notion that the naira will stabilize at N400 to the dollar.
The political economist deems
the notion as unrealistic.
Moghalu expressed his viewpoint
through a series of posts on his X account on Sunday.
He wrote: “Those who want the
Naira to be N400 to the $ are living in a dream world. Even discounting for the
negative impact of speculative attacks on the value of the Naira, the exchange
rate will (and should) reflect its market value in reality, not the
artificiality that the Emefiele era central bank sought to maintain to please
economic illiterates in political power at the time.
“That artificiality created
room for massive arbitrage by speculators which bled the economy. Nigeria does
not (yet) have a productive export economy. That’s the heart of the matter.
“And we do not have $100
billion in foreign reserves. So on what basis would the Naira forex rate return
to some fantasy land soon? It will also take time to regain or achieve full
investor confidence such as we had when we were there (and the rate was
N150-165 to the $).
“The sooner we focus on a
painstaking creation of value-added manufacturing export economy that earns
forex beyond oil in real and significant terms, the better.
“Key to this is the electricity
conundrum in which we are at less than 4,000MW of generation for a population
of 200 million for decades now. Take power to even 20K megawatts (let’s not
talk of 50K for South Africa’s 60 million population or Brazil’s 181K megawatts
for a population only slightly larger than Nigeria) and you will see what the
Nigerian entrepreneurial spirit is capable of.”
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