SAN FRANCISCO, November 04, (THEWILL) – In the past two months, Nigeria has been enmeshed in debates over devaluation of the naira, her local currency. These arguments, which have assumed a groundswell, have again brought to the fore the desirability or otherwise, of devaluation as a solution to economic challenges facing developing nations.
Curiously, proponents of this seemingly alluring pill, among them former Central Bank Governor, now Emir of Kano, Alhaji Sanusi Lamido Sanusi, though experts in their own rights, appear to have learnt nothing from the bitter experience in Nigerian history.
Notwithstanding the envisaged gains as propelled by the International Monetary Fund (IMF), JP Morgan and Co., results from past devaluation attempts in Africa, particularly Nigeria, epitomise sorrows, tears and blood; the regular trade mark of the devaluation monster, which has plunged its users in the third-world countries deeper into the economic doldrums that were meant to be revamped.
It is mystifying that the West, through the instrumentality of IMF and other international organisations, may have chosen the devaluation instrument to consolidation on what has been described as another attempt to re-colonise Africa, of which Nigeria is a leader. It is therefore our position that the naira should not be further devalued.
We recall that in 1986, Gen. Ibrahim Babangida, as military President, adopted the Structural Adjustment Programme (SAP). The agitations had started in the mode of current debates. Unfortunately, it was adopted, despite street protests and oppositions by Nigerians from across the nation.
As a direct fall-out from that structural adjustment, the exchange rate of the naira nose-dived to an appalling level. Till date, the situation seems to have defiled all medications, while the West in whose interest it was done, looked away. Should the nation be made to pass through another bitter experience?
Raising his voice against further devaluation, Managing Director, Cowry Assets Management Limited, Mr. Johnson Chukwu, averred that the Nigerian economy could do without devaluation.
According to him, all the country needs is “to reinvigorate the local economy so that we can have an indigenous growth in the local economy.”
Interestingly, President Muhammadu Buhari had said in a recent interview that he was opposed to further devaluation, saying, “I don’t think it is healthy for us to get the naira devalued.”
The CBN had responded to the crash in crude price by devaluing the local currency by about 20% (N160 – N197).
CBN Governor, Mr. Godwin Emefiele, is also on the same page with the president. Expectedly, if the promise of change by President Buhari, especially in revamping the economy, is anything to go by, the submission is that Nigerians should say a resounding ‘No to Naira Devaluation.’
Rather than further devaluing the naira, the country should evolve a home-grown approach to turning around its economy. This becomes pertinent against the backdrop of other nations in the world who had opted for the indigenous approach to overhauling their economies. While devaluation cannot be dismissed in its entirety, the economies of the developing nations’ need protection and not anything that will further heighten inflation.
It is also instructive that we borrow a leaf from Barbados, whose government had rejected suggestions of devaluation. The country’s Finance Minister Chris Sinckler, said in clear terms that it “will do what needs to be done to protect the Barbados dollar.”
China, for instance, is one country whose indigenous approach to its economy has paid-off. Today, it is not only an Asian Tiger, but has also become a world economic giant, even as India has remained afloat as a global economic player, due to her indigenous approach to its economy.
In rejecting devaluation, our leaders should adopt the China approach to solving its economic challenges. This is topical against the backdrop of our natural endowments; from oil and gas to solid minerals, and from arable land to supporting climate. Above all, the human resource factors needed to blend these ingredients are also in rich supply in Nigeria.
About the Author
