I slept off listening the Presidential Media Chat of some days back. However, I was privileged to hear him answer a few questions regarding devaluation of naira and one important question he asked in return was “what are we devaluing against”?
The British dictionary defines devaluation as . It is pertinent for us to note that devaluation comes in two ways; an intentional and planned policy or by reaction to market events (unplanned). Going by these, I think Nigeria already found herself in the second category of reacting to market events. The country’s currency value has continually dropped which obviously is not as a result of any plan or intention by the government. It has been as a result of the condition in which we have found ourselves. Something really needs to be done! We sure need to act fast! But trust me, not by further devaluing our currency. I truly don’t think that is the way forward unless there is something I am yet to understand about the policy.
I was surprised when people clamored for further devaluation of the currency and I could not understand and still do not understand the logic it. The MD of International Monetary Fund (IMF) , Ms. Christine Lagarde is on a 4-day visit to Nigeria to discuss on the way forward for the country's economy. I have carefully followed up to listen to all her speeches and I am yet to hear her ask Nigeria to further devalue the Naira. Going by the question our President asked during the presidential media chat, What are we devaluing against?
It would have been a different case if we had goods to export and as such being technical in ensuring that these goods receive patronage. it would have also made sense if we were in full control of the economy knowing when to tweak policies to favor one sector or the other. but this is not the case at the moment and as such, won't make any sense to do that now. So many policies have been put in place of late all towards a better economy, I think we should watch how far these policies take us before deciding whether or not to bring up new ones.