While the central bank maintained the official exchange rate at N197 – N199 despite being a far cry from the parallel market value of N310 which many see as the true value of the naira, small businesses have suffered and the averagege Nigerian which the government said it was protecting by failing to devalue, is suffering. Edo State Governor Adams Oshiomole said the government I doing the right thing.
Oshiomhole who spoke in Lagos while delivering a keynote address at the maiden edition of The Cable Colloquium, entitled: “The Naira on Trial: To Devalue or Not?” said that the government’s position was to pull speculators out of business.
According to the governor, a history of devaluation of the nation’s currency since the Structural Adjustment Programme (SAP) has not benefited the economy in any way.
“The first time the concept of devaluation was introduced to us by the International Monetary Fund (IMF), it generated a national debate.
“Chief Olu Falae lectured us about the beauty of devaluation. When you devalue, the price of imported goods will go up, the capacity to consume will drop, and total outflow of forex will be less.
“Nigerian goods will become cheaper, importation will be less and exportation will be more. This will lead to more foreign exchange and will shore up our foreign reserves,” Oshiomhole said.
He, however, noted that devaluation had never translated to an approximate increase in exported goods because of “Nigerians’ appetite for foreign or imported goods.”
He argued that available statistics from the Central Bank of Nigeria (CBN) showed that “the thesis that if we devalue, we will export more, cannot be supported. The real critical question is – will devaluation curb our appetite for imported goods? I am unable to find gains in devaluation,” Oshiomhole said.
He said that currency speculators were the ones manipulating the naira, and exerting pressures on the CBN to devalue it, for their selfish gains.
“Some people are speculating on the naira; just manipulating the naira for their selfish ends. This is how a section of the business community make their money,” Oshiomhole said.
He called on well-meaning Nigerians to support the forex policy of the CBN and the stand by the Federal Government not to devalue the nation’s currency.