There is a consternation of "pretender Economic analyst," and arm-chair Economists, some obviously with ulterior motives, sell the false viewpoint that the Naira has to be devalued further, to avert Arbitrage- as if Arbitrage is a new disease in Nigeria currency management system over the years. No Arbitrage will be an issue, forever no matter how you decree a devaluation. These guys like obfuscation! They will never tell you that in 1988 and twice in 1992, Nigeria official currency- the Naira rate was devalued from N14 to a dollar, to N18 and then to N22 to a dollar because of same Arbitrage window gap between the official rate and the "Black market rate" to stop the sins of the arbitrage operators, but did the gap not always expand after each such devaluations?
All these opportunists rent-seekers, claiming to be experts with their foreign collaborators should be ignored- they are not smart enough. The solution to firming up the Naira and stopping arbitrage and indeed multiple currency exchange market, one Official and the other Parallel rates is PRODUCTION and more production of value added Agricultural products before exports ( not just primary products ), of mining our enormous waiting to be tapped solid minerals, development of our massive Tourism potentials to attract foreign visitors and generally export more of our services and Technology sales within Africa where we may have comparative advantage.
Whether you use the "Purchasing Power Parity," basis or "Comparative Current Cost" method to compute the relative value of the Naira V Dollar, no way will $1 buy more in the US than what N100 will buy, for similar good or service in Nigeria. The elites who destroyed our Educational and Health infrastructure should go source Fx from Black market or BDCs from wherever to pay for their wards School fees and maintenance in US,UK or Ghana, or for their Pneumonia treatment in India or Europe.
Emefiele, the CBN Governor should be encourage to ban all the banables and boycott all the "boycottables." He must also stand firm on stopping BDCs from collecting free dollars for arbitrage trading by the Bureau de change-stupidly granted them by the not-so-bright Charles Chukuma Soludu during his tenure as CBN governor. No where in the world does CBN dole out Forex to BDCs at costs to the citizens. It was a very silly act of cluelessness, like his ill-thought Bank re-capitalization" policy. Again no where in the world do you prescribe one single huge Capital base/structure for all banks in its economy- One cap can't fit all; Its sheer laziness and "lower fruits" grabbing idiocy, and the policy killed off many small and struggling banks!
Comments
Post a Comment