The former Presidential aspirant, Kingsley Moghalu, cautioned President Bola Tinubu against being fixated on a stronger naira, as it could affect the exportation drive.
Moghalu said Nigeria having a stronger naira could make the country an import-dependent economy. He made this known during an interview with Arise TV on Thursday.
His statement comes amid President Tinubu’s foreign exchange reforms meant to strengthen the naira against the dollar and also increase foreign reserves through improved foreign investments.
Tinubu has devalued the naira as part of his forex reforms, a move that has unified the multiple exchange rates in Nigeria.
As of Wednesday, the naira to the dollar exchange rate in the official market is N763.17/$1, but the United States currency was sold at N760.3/$1 in the black market.
Note that before the devaluation of the naira last week Wednesday, both currencies exchanged at N471.67/$1 in the official window, against the N755.7/$1 rate in the black market.
However, the expectation of the government and the Central Bank of Nigeria (CBN) is to ensure stability in the foreign exchange rates, then the naira will strengthen against the dollar in the long term.
Speaking on the government’s policies, Moghalu warned that a stronger naira could have a side effect, as it will make importation cheaper, hence, making the country import-dependent.
The former Deputy Governor of the Central Bank of Nigeria (CBN) suggested that Tinubu’s government should employ competitive devaluation, which he said economies that are productive, such as China, conduct.
“I also need to say that we have this fixation on having a strong naira. Having a strong naira when you are not a productive economy, all it does is that it makes you an import-dependent economy.
“Because having a strong naira makes your important cheaper. Economies that are productive, actually, sometimes engage in competitive devaluation.
“China does this, so that their goods are cheaper for foreigners to buy, and therefore, they get more money into their country, rather than wanting their currency to be very strong,” Moghalu expatiated.