By Tosin Olatokunbo
Before President Muhammadu Buhari came to power in 2015, N230 was exchanged for $1, and during his campaigns as the presidential candidate of the then opposition All Progressives Congress, APC, he promised to make the national currency equal to the dollar.
“It is sad that the value of the naira has dropped to more than N230 to one dollar; this does not speak well for the nation’s economy,’’ Buhari said in one of his campaigns in March 2015, promising he would ensure that the Naira was equal to the dollar in value, if voted into office.
But since he came to office, Naira has been officially devalued twice by the Central Bank of Nigeria, CBN the latest came on Thursday when the bank requested that bids for foreign exchange be made at 380 naira per dollar, compared with 360 previously.
The implication of that, analysts say is that Naira has now been devalued by 20 per cent within four months.
The apex bank had earlier in March devalued the currency by 15 per cent, even though, Godwin Emefiele, denied doing such.
“CBN has a responsibility to see to the adjustment in the national currency. What you have seen is an adjustment in the country’s currency (and not devaluation),” Emefiele said at the time.
The dollar was exchanged for N307 before it was ‘adjusted’ to N360 four months ago by the CBN.
The major implication from this devaluation, analysts say, is that the multiple exchanged rates have has now been abolished.
Emefiele said in June the apex bank’s planned to eliminate the multiple exchange system to improve the transparency of the nation’s currency management system.
What this means, for example, is that the window, opened by CBN for investors and exporters in 2017, where they get forex at cheaper rates has now been effectively shut.
Known as the nafex, the window was meant to serve as a spot-rate for investors and exporters “to help them against the effects of economic recession, and woo back foreign investors at the time,” Fola Ibidoye, an economic analyst said.
He told the magazine that the system failed to achieve the desired results, thus leading to the demands for currency unification among various players.
Apart from this, he explained that the biggest pressure came from the International Monetary Fund, IMF which has consistently called for the naira to be devalued.
In February, the fund recommended to the federal government to devalue the naira, insisting that its current value did not allow for competitiveness.
IMF also told the Buhari administration to lift foreign exchange ban placed on some imported items and allow the naira to reflect market forces.
Meanwhile, analyst insists that the devaluation will have implication on the price of goods and services, as well as worsen inflation in the country.
