Floating the Naira Will Cause More Economic Damage Than It Solves – Experts

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Financial experts, fearing economy breakdown have warned President Muhammad Buhari, ahead any talks by some politicians and cabinet members to float the naira, saying the move would lead to further tumbling of the Naira and collapse of the economy.  

 

“It takes a whole lot of stupid government policies to destroy a great economy. And some ministers and politicians of varying interests seem to be pursuing this to the bitter end, according to an expert on Friday.

“If you float the naira, the economy will crumble. It is as simple as that. Let nobody deceive you,” one of the experts said stressing that “If we float the naira, Nigeria will take a flight to Zimbabwe via Venezuela.

“Individuals pushing the CBN to float the naira have an agenda. They want the naira to fall to N1000 against the dollar and then turn around to buy off every available assets in the country and turn Nigeria to private enterprise. It is unfortunate and Nigerians must resist this move, he stressed.

The reasons behind the pound’s collapse are, of course, well known. The much more important question is what crises will follow the pound’s collapse and how much Egyptians will be affected by the flotation?

Floating the currency, a key demand made by the IMF, World Bank and other international financial institutions to loan money to Nigeria.

The reasons behind the Naira’s collapse are, of course, well known. The much more important question is what crises will follow the naira’s collapse and how much Nigerians will be affected by the flotation?

No fewer than five economists unanimously agree that the continuous fall of the naira against major foreign currencies is partly due to the huge amount of corruption money in circulation in the country.

“No economic magic can solve this problem, even the best economic policies in the world will fail under the present realities in Nigeria. No magic banker in the world can restore the naira unless corruption money is curtailed, said an economist.

On 20th June last year, the first day of trading following a trial currency float, the value of the naira dipped by an alarming 31% selling at 288.85. A week later the naira plunged further trading at 350.50.   In just a matter of hours, Nigerians lost over 40 percent of the value of their money.

Dr Paul Usman, a Lagos based financial expert said, ‘ The floating of the naira is merely a desperate attempt to be seen to be taking action. It is not a solution for Nigeria’s economic crisis”.

“Nigerians will witness the naira’s purchasing power further deteriorate and millions of citizens will fall below the poverty line while money, savings and local investments will gradually evaporate, he concluded.

Some Analysts  last month said the floating of the naira canvassed by these politicians could exacerbate bad debts already standing at 10 percent of bank loans. Bankers will be forced to adjust loans made in dollars to the new value of the naira, including over $10 billion loaned to local companies in the country to buy assets from oil companies in the past.

 

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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