Senator Datti Baba-Ahmed has suggested steps that Nigeria can take to achieve stable foreign exchange rate
This, he disclosed during an interview on Channels TV, where he gave insight into plans to halt the free fall of the Naira and added that it is an appreciating currency.
Baba-Ahmed has frequently expressed his economic criticism of Nigeria’s monetary policy under President Buhari.
What Baba-Ahmed is saying
Baba-Ahmed, a presidential running mate of Peter Obi under the Labour Party said, “Naira is no longer going to slide. All the fundamentals behind the Naira will strengthen – including the belief in ourselves, our education, strength and unity – which are all built in the naira. The moment we turn it around, naira will not fall again.”
He added that part of the Naira problem is its multiple exchange rate systems. He said “It is the way dollars are sold. In terms of the exchange rate, there are 11 different exchange rates. That should not be sustained.“
He said that “there is currently a lack of confidence for people to bring money into Nigeria. And then there are administrative bureaucracies which, if you bring dollars into Nigeria, they give you terrible exchange rates. But No, we will give you a favourable exchange rate.”
He stated that his administration would resolve the long history of Nigeria’s depreciation. He said, “The fear behind the naira is not because it is low, it is the fact that it continues to be low. Once we stop that and the world acknowledges that the naira is not going to fall in Nigeria, by force we will hold it and the only way it will go is up.”
“Once you do that, nobody will hedge against the naira. It will become officially an appreciating currency which means naira will be held and the moment you hold naira, you don’t have to rush to dollarize it,” he added
What you should know
- Baba-Ahmed recently disclosed in an interview with Arise TV that the reasons for Nigeria’s poor economic fortunes are “mismanagement and corruption” which he says are responsible for the poor economic trajectory of Nigeria.
- The Naira has massively declined by N29 in the second quarter of 2022. This is indicative of the second-worst quarter depreciation in Nigeria, while the worst quarter was seen in Q3 2021 when the Naira fell by N44.
- Nairametrics also reported that since the introduction of the Central bank of Nigeria’s (CBN) “Naira4Dollar Scheme” in March 2021, the Naira rate has fallen by a whopping N127 (or 26%).
- The World Bank has stated that the Central Bank of Nigeria’s multiple exchange rates, trade restrictions, and the financing of the public deficit continue to damage the business environment.