By Uche Amunike
Former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has described the position of people expecting the Naira to be stable at N400 to a dollar, as unrealistic.
He made this disclosure through various posts he made on his verified X account on Sunday. His words: ‘Those who want the Naira to be N400 to the $ are living in a dream world. Even discounting for the negative impact of speculative attacks on the value of the Naira, the exchange rate will (and should) reflect its market value in reality, not the artificiality that the Emefiele era central bank sought to maintain to please economic illiterates in political power at the time.’
‘That artificiality created room for massive arbitrage by speculators which bled the economy. Nigeria does not (yet) have a productive export economy. That’s the heart of the matter.’
He further explained that because Nigeria did not have $100 billion in foreign reserves, it will be hard for the Naira foreign exchange rate to go back to what it was in the good old days. Hear him: ‘And we do not have $100 billion in foreign reserves. So on what basis would the Naira forex rate return to some fantasy land soon? It will also take time to regain or achieve full investor confidence such as we had when we were there (and the rate was N150-165 to the $).’
‘The sooner we focus on a painstaking creation of value-added manufacturing export economy that earns forex beyond oil in real and significant terms, the better.’
‘Key to this is the electricity conundrum in which we are at less than 4,000MW of generation for a population of 200 million for decades now. Take power to even 20K megawatts (let’s not talk of 50K for South Africa’s 60 million population or Brazil’s 181K megawatts for a population only slightly larger than Nigeria) and you will see what the Nigerian entrepreneurial spirit is capable of.’
Relatively, Moghalu tasked Tinubu-led administration and the CBN to hold the Chief Executive Officers of commercial banks responsible for the free fall of the Naira and manipulation of the foreign exchange rate, instead of using traders and cryptocurrency traders as scapegoats.
He made this statement during the 16th annual Leadership Conference, in Abuja, Tuesday, where he was Keynote Speaker.
Moghalu, made reference to BINANCE, which the federal government clamped down on, to the point of holding their top officials in detention for alleged manipulation of the foreign exchange market. He maintained that the major problem Nigeria has is bad governance, which is the reason that the country is in its present economy mess. He stated: ‘If you cannot govern the people well, you cannot manage the economy.’
He advised President Tinubu to set up a seven-man team of economic advisors to help solve these problems. He however condemned the newly formed economic advisory team by the president as a combination of businessman, who are also players in the economy, stating that they would not give the required outcome that would help revive the economy.
