A former Deputy Governor of the Central Bank of Nigeria, Kingsley Moghalu, has blamed the continuous depreciation of the naira on Nigeria’s unproductive economy.
Moghalu stated that the country cannot determine the exchange rate of its currency when it depends largely on one commodity.
He explained that the only thing Nigeria exports is crude oil, adding that the price of the commodity is not determined by the country, hence, the nation’s volatile economy.
Speaking in Abuja on Friday while announcing his defection to the African Democratic Congress, the party on whose platform he is expected to contest the 2023 presidential election, he said, “We want to determine the exchange rate but we are not producing or exporting anything other than crude oil. The reason naira’s value to the dollar is what it is, is because Nigeria is not a productive economy.
“The number one thing that determines the value of any currency is how productive its economy is because when you export a diversified range of value-added products, you’re earning foreign exchange in different ways.
“But if you are a one-trick pony, you depend on one commodity and you don’t control the price of that commodity, when the price sneezes, you catch pneumonia or you catch COVID. So, this is why we are suffering concerning the naira. It is also a demand and supply issue and also about inflation. So, when a country is experiencing inflation, it affects its exchange rate negatively.”