Who are the people living in a dream world if they want the Naira to be worth N400 to the dollar? Former deputy governor of the Central Bank of Nigeria, Kingsley Moghalu, claims that people who desire for the Naira to be valued at N400 against the dollar are living in a fantasy land.
Moghalu clarified, using his X account that the exchange rate ought to accurately represent the currency’s market worth.
He asserted that the Central Bank’s artificiality was established during the Godwin Emefiele period and was maintained to appease the politically powerful but uneducated economic elite of the day.
He said that the artificiality allowed speculators to engage in enormous arbitrage, which damaged the economy.
The sooner the nation concentrated on developing a manufacturing export economy with value addition that generated foreign exchange beyond oil in a meaningful and tangible way, the better, he said.
He stated: “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 4,000 megawatts 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.”
