If the managers of the Nigerian economy were to be sincere with the nation, they will agree that there is something basically wrong with the continued fall in the value of the Naira. Even when our so celebrated foreign reserve stood at $60billion and an import demand cover of about 20 months, the Naira exchange rate never firmed up. Rather, the Naira was on a slide against other currencies; a situation which negates all known economic principles.
Yet in the early 1980s, when the nation's foreign reserve stood at just $2billion with a four-month import cover, the Naira exchanged for less than one Naira to the Dollar.
So, what is it that went wrong with the economy in these 25 years that the Naira has been so battered to the point of exchanging for as much as N215 to the Dollar? The answer is not far fetched from a mismanaged currency by the Central Bank of Nigeria (CBN) in collusion with the commercial banks.
It is obvious, and the warning signs are crystal clear, that Nigeria's economic managers have broken the doors to economic sanity and compelled Nigerians to tow the path of poverty. Before the free fall of Naira which began with the introduction of the Structural Adjustment Programme (SAP), during the regime of military President, Gen. Ibrahim Babangida, Nigeria was never rated among the poorest nations of the world; neither did Nigerians crave the Dollar nor did 70% of Nigerians live on a Dollar per day.
As a panacea for the deepening poverty, advocates like Henry Boyo, have proffered a better managed currency for a stronger exchange rate of the Naira as the only solution. It is discernable that the poverty in the land correlates with the depreciation of the Naira; and regrettably, the value of Naira does not correlate with the high foreign reserve.
It is an economic contradiction; an aberration which suggests a deliberate manipulation of the currency - and by extension the economy - to keep Nigerians poor.
Else how did the affluence that resided with the Nigerian and his Naira in the 1970s and early 1980s suddenly vanished into thin air, so much so, over 70% of Nigerians, today, are now suffocating under the yoke of poverty?
The CBN, as the manager of the economy, has as its prime mandate, price stability. That, of course, can only be ensured through a stable exchange rate. But the CBN is known to deliberately devalue the Naira on monthly basis through the creation of excess liquidity and the substitution of Dollar earnings with minted Naira to be shared at the monthly federal allocation; thereby creating scarcity of the Dollar and surplus of the Naira in the economy.
It is only logical, economically, that with a surplus Naira pursuing few Dollars in the open market, the value of the Naira will continue to fall. The CBN is, therefore, deliberately devaluing the Naira, with the prevailing climate. Certainly, this policy needs to be reviewed.
This Newspaper is of the opinion that with this CBN policy, the Naira will never witness any stability. That the Naira is on free fall is not just because the international oil price is down - after all, when oil sold for over $140 per barrel the Naira was never known to have risen in value - but the fact that the CBN acting on the advice of the Brettonwood institute is deliberately keeping Nigerians poor.
That is why, for 25years, Nigeria has been fighting excess liquidity. Nigerians need to hold the CBN and the commercial banks accountable for the downward value of the Naira. That is the only way to arrest the deepening poverty in the land.
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