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Buhari rejects naira devaluation

By Mohammed Abubakar, Abuja
29 January 2016   |   2:15 am
PRESIDENT Muhammadu Buhari has declared that his government will not devalue the naira. He noted that devaluing the naira would not confer any benefit on the citizens...


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PRESIDENT Muhammadu Buhari has declared that his government will not devalue the naira. He noted that devaluing the naira would not confer any benefit on the citizens.

Buhari spoke late Wednesday in Nairobi, Kenya at an interactive meeting with Nigerians resident in that country. According to a statement yesterday by his Senior Special Assistant on Media and Publicity, Garba Shehu, Buhari maintained that while export-driven economies could benefit from the devaluation of their currencies, move would only result in further inflation and hardship for the poor and the middle class in Nigeria’s import-dependent economy.

The president added that he had no intention of bringing further hardship on the country’s poor who, he said, had suffered enough already.

Likening devaluing the naira to having it “killed”, Buhari said that proponents of devaluation would have to work much harder to convince him that ordinary Nigerians would gain anything from it.

The president also rejected suggestions that the Central Bank of Nigeria (CBN) should resume the sale of foreign exchange to Bureaux de Change (BDCs), saying that the BDCs business had become a scam and a drain on the economy.

“We had just 74 of the bureaux in 2005, now they have grown to about 2,800,” he said. He alleged that some banks and government officials used surrogates to run the BDCs and prosper at public expense by obtaining foreign exchange from government at official rates and selling it at much higher rates. “We will use our foreign exchange for industry, spare parts and the development of needed infrastructure.

“We don’t have the dollars to give to the BDCs. Let them go and get them from wherever they can, other than the Central Bank,” Buhari told the gathering.

He reaffirmed his conviction that about a third of petroleum subsidy payments under the previous administration was bogus. “They just stamped papers and collected our foreign exchange,” he said.

The president appealed to Nigerians studying abroad to bear with his administration as it strives to address the challenges they are facing as a result of new foreign exchange measures.

He said that he was optimistic that the Nigerian economy would stabilise soon with the efficient implementation of measures and policies that have been introduced by his administration.

The CBN Governor Godwin Emefiele had on Monday, said in Abuja that there would be no devaluation of the naira. He told reporters after the Monetary Policy Committee (MPC) meeting that the apex bank was “already working on different scenarios. The models are being worked on and we will look at them as much as possible and we will continue to discuss at management levels and we will try as much as possible to continue to share our thoughts with the fiscal authorities with a view to harmonising the positions to ensure that notwithstanding the drop in crude prices, we are able to continue to run the government and continue to do business.”

Emefiele had also in November disclosed that CBN refused to further devalue the naira because it would not have had direct impact on the country’s exports as a mono-economy.

The CBN governor added that naira devaluation would lead to hyper-inflation because when the import is higher, for the country that largely depends on importation, it would lead to increase in price of goods. He spoke at the All Civil Society Economic Workshop with the theme “Understanding the Economic Implications of the New CBN Policies and the Role of Civil Society in Policy Advocacy and Economic Development,” organised by the Coalition of Civil Society Groups in Abuja.

Represented by the Director of Financial Market, Mr. Emmanuel Ikeji the CBN governor had stated: “The simple idea behind devaluation is that it will make your import more expensive while your export is cheaper.