A financial expert, Dr Rafiu Adebayo Ibrahim, has recommended that having an economy that is not tied to the price of one product that is prone to wild price swings, is an obvious solution to habitual devaluation of Naira.
A former Chairman, Senate Committee on Banking Insurance and other Financial Institutions, said this in a paper delivered at the 30th edition of Media parliament courtesy of Nigeria Union of Journalists (NUJ) Kwara Council, held at the Press Centre, Offa Road, GRA, Ilorin , Kwara State capital.
Senator Rafiu, who talked on the topic, titled “Naira devaluation by Central Bank of Nigeria: How did we get here? What are the challenges and prospects for us as a nation.”
He traced history of devaluation of the naira in Nigeria to year 1986, when General Ibrahim Babangida took over the leadership of Nigeria government through a coup.
“Since the beginning of General Babangida administration, and for 35 years now, the Nigerian naira’s relationship with the US dollar (and other foreign currencies) which is referred to as the exchange rate, has been erratic, unpredictable, violent and full of heartbreak and tears.
“I must quickly add, however, that the built-in dysfunction has also made a lot of people very rich, and the nation poorer.”
He however recommended that as part of solution to the menace, “people in the position of authority and corridor of power must allow economics to rule and reign when it comes to the Naira exchange rate by allowing the market to determine its fair value both at the time of boom and otherwise”
Saying further that Nigeria government must take economy diversification serious
“It is time to diversify the economy under a truly long-term strategic plan that will turn around the fortunes of the nation away from being mono-product as is presently the case.
“Industrialization and local production of goods that are in high demand must be encouraged, and more importantly, insecurity that is eating deep into the economic life of the nation, as the devastating effects of the situation, if unattended, will make the value of the nation’s currency worse than we all can imagine.”
He also advised all tiers of government to imbibe habit of savings, said “It is to stop paying lip service to instituting a concrete savings culture at all levels of government; federal, state and local. Even as an individual, when you consume all your income and fail to save, you will be feeding from hand to mouth and will always be vulnerable anytime that there is drought because you have no savings to fall back on” the financial guru, recommended.
Earlier in his welcome address, the Chairman, Kwara State Council of Nigeria Union of Journalists (NUJ), ‘Lanre Ahmed, linked the problem to the summer sault of the Central Bank of Nigeria on the nation’s monetary policy, which he said it has consistently weakened naira in the global economy and in turn affecting the purchasing power of the masses