What Does Devaluation Of Naira Could Mean For The Future?
On Monday, at the midterm review of President Muhammadu Buhari’s second term, the discussion of naira depreciation found a good place to take centre stage. Vice President Yemi Osinbajo explained how the country’s Economic Sustainability Plan aided in the country’s recovery from recession.
At the end of his speech, Osinbajo told a room full of ministers, CEOs, diplomats, and civil servants that the Central Bank of Nigeria will devalue the naira to reflect the state of the market.
The law professor did not mince words when he stated that the CBN’s demand-management strategy needs to be reconsidered.
“As for the exchange rate, I think we need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply,” Osinbajo said.
“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserve can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.”
The most audacious aspect of Osinbajo’s call for devaluation was that he made it in front of his boss, President Muhammadu Buhari.
Given Nigeria’s weak economy, what does the continued depreciation of the Naira mean for Nigerians in the future? Let’s talk about it.
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