The Emir of Kano has described the monetary policy regime of the CBN as wrong and according to the immediate past Governor of the Central Bank of Nigeria, as quoted by Financial Times, President Muhammadu Buhari risked exacerbating the country’s economic woes and undermining his government’s achievements on security and corruption by endorsing exchange rate policies that would never work. The former CBN governor now Emir gave his reasons. INFORMATION NIGERIA in this piece outs together the 6 crucial points Sanusi highlighted…
1. The exchange rate policies which are doomed to fail endorsed by President Muhammadu Buhari puts his administration at a risk of exacerbating the country’s economic woes and undermining his government’s achievements on security and corruption.
2. He said he was disappointed to see Buhari’s strong security and anti-corruption efforts overshadowed by a monetary policy regime with “very obvious drawbacks that far outweigh its dubious benefits”.
3. Sanusi said the CBN, with Buhari’s public endorsement, last year imposed tight capital controls and pegged the naira at an official rate currently 35 per cent stronger than the black market rate was such a wrong decision and risked taking away attention from everything else Buhari is doing.
4. He said because of that, exporters and investors “are holding on to foreign currency, as no one would sell at the rate the government is setting,” while “the government does not have the reserves to keep the exchange rate at its official level in the market
5. He buttressed his points further by saying that these policies have been tried in different parts of the world and in this country before, and they have just never worked. No matter what the stated intention behind them are, they are wrong.
6. On a final note, Sanusi predicted that the gap between the black market rate and the “artificial” official exchange rate will keep widening
For the sake of every Nigerians, hopefully Emir Sanusi’s prediction won’t happen!!!