Sharing my latest opinion piece for the Daily Trust
The “CBN’s Naira 4 Dollar Scheme”: A desperate move to redeem the Naira? Why it may not be effective and what can be done.
The naira has crashed to a level not seen in half a century – its US dollar value wiped by over 200%.
I argue that the scheme being used by CBN may be ineffective in rescuing the naira. Nonetheless, I provide a couple of suggestions – sharing my perspective on how the value of the currency can be strengthened, one of which is to disband the Bureau de Change because most of the agents operate under the cloak of darkness, serving as shadow market linchpins in filthy currency deals.
- If the dollar appreciates by one naira, Nigerians abroad are willing to send home an additional $73 million per year in remittances. That means the central bank will have to keep the naira weak if it must attract remittances.
- Nigeria misallocates its forex. It spends roughly 90% of its forex on three items: food imports, debt servicing, and the importation of petroleum products.
P.S. A ruthlessly pruned version of the online edition is on page 12 of 26 March print version of the Daily Trust Newspaper.