Call For Naira Devaluation: SEE The 5 Things Nigerians Should Ponder Upon

Naira-Dollar

There have been speculations/suggestions from different quarters that the naira should be devalued against the U.S. dollar and other major foreign currencies. A lot of you might be wondering what the effects of naira devaluation would bring upon our economy. In a bid to aid your understanding, INFORMATION NIGERIA has put together for you, 5 things to ponder upon as regards naira devaluation…

1. The devalued naira will drive export of local products, which do not exist in the required volume for now.

2. When this happens, it will create an additional burden on the populace, the reason being that the cost of consumables, across the board, will escalate.

3. As the direct consequence of the raise in the base lending rate, the cost of loanable funds would have risen. In such case the development will be counterproductive, and against the thrust of the government’s touted plan to create jobs.

4. There is the expectation that government’s revenue, in terms of naira will move up, because of the wide exchange rate disparity between the dollar and the naira. But the point must be made that this expectation may be unrealisable because of two variables – the falling oil prices and lower crude production aggregate.

5. In the developed nation’s when currencies are devalued, it is to encourage exports, because the prices of local products serve as an incentive and a toast for foreign buyers. In the process, they earn foreign exchange, increase production and create additional jobs. Unfortunately, that is not the case with Nigeria.

Are we ready for this???

1 COMMENT

  1. Based on the above explicit, explanations, there is no basis for the devaluation of the naira.

    These white men are very dubious! That may be one of the reasons Christiane Legarde came to Nigeria for. Our economy is not export based. Invariably, we may not have choice than to dance their way!

    The only way out is for us to embark aggressively on our agricultural development. To be self-sufficient in food production especially. Majority of the food we eat are import-based. The more we import, the more we’ll be forced to devalue our naira.

    Before the discovery of oil, naira was more valuable than the dollar. Then we had groundnut pyramid, cotton in the north and cocoa in the southwest and many more. The greatness of America started with agric not technology!