By Ayo Yusuf
The initial enthusiasm that President Bola Tinubu’s administration has the magic wand to solve Nigeria’s economic woes is waning as the naira reaches a new low today in its weeks-long downward spiral, plummeting to a depressing N1210 against the US dollar in the parallel market.
The alarming depreciation, as published by Aboki FX, casts a shadow of uncertainty over the nation’s economic stability.
The persistent decline of the naira is a source of concern for businessmen and other Nigerians and brings to sharp relief the challenges associated with President Tinubu’s fiscal policies.
So far, the policies have had far-reaching consequences, including inflation and diminished economic purchasing power as Tinubu pursues what his cabinet refers to as strategic moves, such as the petrol subsidy removal, which has been met with resistance and scepticism.
The new administration however insists that these fiscal and monetary policies reflect an attempt to reduce the government’s financial burden and promote a more market-driven economy, especially the decision to adopt a clean float foreign exchange management.
The presidency says the measures will allow the naira to establish its value through the open market forces.
On September 26, the naira witnessed an unprecedented historical low, dipping to N1000 against the U.S. dollar. Since then, the currency has lost 17 percent of its value.
The devaluation has made foreign exchange transactions inaccessible, especially in the parallel market, where a substantial percentage of the country’s financial transactions occur.
The repercussions of the currency depreciation are far-reaching. It impacts businesses and citizens grappling with rising prices and economic uncertainty.
Former Minister of Finance, Chief Olusegun Aganga, recently explained that the naira would continue to be weak if the country remains an import-dependent country.
Chief Aganga who was speaking at the 3rd Adeola Odutola lecture, during the 51st Annual General Meeting of the Manufacturers Association of Nigeria over the weekend said Nigeria must produce for local consumption and more importantly for export, for the naira to be strong.
TheNewDiplomat reports that the local currency fell from about 450/dollar to an average of 760/dollar following the exchange reforms of President Bola Tinubu and has been on a free fall since.
According to Chief Aganga , “What is the wisdom in spending billions defending the naira when it continues to fall instead of investing in genuine manufacturers and exporters of high-value products that would earn Nigeria foreign income and more.”
The former Minister charged the government to declare the industrial sector a national priority sector and back it with plans, policies, and money.
“Unlike the trillions spent on subsidies, bailouts, the Agric Anchor Borrowers Programme, the refineries, I can assure you that every naira, no matter how large, that is well spent on the strategic industrial sectors can be easily recovered and will deliver tremendous benefits to the economy and the nation,” he said.
