Devalue naira now, Fayose tells Buhari
February 21, 2016
Ekiti State Governor, Ayodele Fayose, has called for the devaluation of naira, saying with the gap between the official rate of N199 and parallel market rate of up to N400 to one dollar meant the currency has already been devalued.
According to him, the current forex policy is short-changing Nigerians and it has caused collapse of business with prices of goods skyrocketing every day.
In a statement by his Special Assistant on Public Communications and New Media, Lere Olayinka, on Sunday, Fayose said it made no economic sense for the Federal Government to keep calculating the country’s revenue on the basis of the Central Bank of Nigeria official rate of N199/dollar.
This, he explained, was because states and local councils, which share the revenue, run their business at the parallel market rate.
The governor, who lamented that the gap between official rate for the dollar and parallel market rate had never been up to or more than N200, stressed that the current forex policy encouraged corruption.
He urged the president to pay more attention to the ailing economy of the country instead of travelling around the world.
He said, “President Buhari has travelled to 24 countries in eight months, and will be spending 16 out of the 29 days in February outside the country, with over $500,000 being spent on estacode while the Presidential Air Fleet, which includes fuelling of the planes and allowances for crew members is said to be in the range of $500,000.
“The President’s entourage obviously collects travel allowances in dollars at the official rate of N199 and come back to Nigeria to change it at the open market rate of N400. That must be the reason they encourage the President to keep junketing abroad when life is becoming unbearable for Nigerians.”
________________________________________________
Four months after...
BREAKING: Finally, CBN devalues naira… official rate may be N300 per dollar
June 15, 2016
The Central Bank of Nigeria (CBN) hs finally decided to allow the naira exchange rate to be market-driven, setting the stage for a devaluation of the currency when the new system comes into effect June 20.
The apex bank will select a group of around 10 primary dealers through which the naira will be traded, reports Bloomberg.
There will only be one exchange rate and the bank will intervene in the market “as the need arises,” Governor Godwin Emefiele told reporters in Abuja on Wednesday.
He said:
“We’re talking about an open, transparent two-way system,” Emefiele said. “It’s intended we don’t have speculators and rent-seekers. I don’t expect that any other exchange rate will be recognized.”
Three-month non-deliverable naira forward contracts surged as much as 9.5 percent to a record N333 per dollar after the announcement, suggesting traders expect the currency to trade around that level in the market, compared with the current official rate of 199.
The Federal Government has faced calls for more than a year to devalue the currency, as other oil exporters from Russia to Kazakhstan and Angola have done, amid a rout in crude prices since mid-2014 to around $50 a barrel.
Investment into Nigeria has shriveled as foreigners are put off by capital controls needed to defend the currency’s peg of 197-199 per dollar, while local businesses have struggled to import raw materials and equipment. Emefiele said last month the central bank would implement a “flexible” exchange-rate policy to help alleviate a dollar shortage that has strangled the economy.
Gross domestic product contracted in the three months through March for the first time since 2004 and inflation accelerated to 15.6 percent in May, the highest rate in more than six years, as manufacturers struggled to import raw materials and equipment. The naira will probably trade in a range of 280 to 350 against the dollar after the central bank implements its decision, analysts at Johannesburg-based Rand Merchant Bank said in a note on Wednesday before the announcement.
________________________________________________
The earlier they start listening to this man the better for them. Fayose is not just a governor. He is an experienced one!
by ROTMANLUV 2023-07-08, 17:34
