Friday, 14 April 2017 14:13

Nigeria Economic Crisis: Floating the Naira Will Cause More Problems Than It Solves- Experts

Financial experts, fearing economy breakdown have warned President Muhammad Buhari, ahead any talks by some politicians and cabinet members to float the naira, saying the move would lead to further tumbling of the Naira and collapse of the economy.  

 

“It takes a whole lot of stupid government policies to destroy a great economy. And some ministers and politicians of varying interests seem to be pursuing this to the bitter end, according to an expert on Friday.

“If you float the naira, the economy will crumble. It is as simple as that. Let nobody deceive you,” one of the experts said stressing that “If we float the naira, Nigeria will take a flight to Zimbabwe via Venezuela.

 “Individuals pushing the CBN to float the naira have an agenda. They want the naira to fall to N1000 against the dollar and then turn around to buy off every available assets in the country and turn Nigeria to private enterprise. It is unfortunate and Nigerians must resist this move, he stressed.

Floating the currency, a key demand made by the IMF, World Bank and other international financial institutions to loan money to Nigeria, Per Second News gathered.

The reasons behind the Naira’s collapse are, of course, well known. The much more important question is what crises will follow the naira’s collapse and how much Nigerians will be affected by the flotation?

No fewer than five economists unanimously agree that the continuous fall of the naira against major foreign currencies is partly due to the huge amount of corruption money in circulation in the country.

“No economic magic can solve this problem, even the best economic policies in the world will fail under the present realities in Nigeria. No magic banker in the world can restore the naira unless corruption money is curtailed, said an economist.

On 20th June last year, the first day of trading following a trial currency float, the value of the naira dipped by an alarming 31% selling at 288.85. A week later the naira plunged further trading at 350.50.   In just a matter of hours, Nigerians lost over 40 percent of the value of their money.

Speaking to Per Second News, Dr Paul Usman, a Lagos based financial expert said, ‘ The floating of the naira is merely a desperate attempt to be seen to be taking action. It is not a solution for Nigeria’s economic crisis”.

“Nigerians will witness the naira’s purchasing power further deteriorate and millions of citizens will fall below the poverty line while money, savings and local investments will gradually evaporate, he concluded.

Analysts who spoke to Per Second News last month said the floating of the naira canvassed by these politicians could exacerbate bad debts already standing at 10 percent of bank loans. Bankers will be forced to adjust loans made in dollars to the new value of the naira, including over $10 billion loaned to local companies in the country to buy assets from oil companies in the past.

Checks by Per Second News also indicate that the coming crisis as a result of floating will be even more intense as prices of food, fuel and services will rise at dizzying rates and the population’s economic condition might deteriorate.

Last modified on Sunday, 23 April 2017 20:49

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