According to them: “The Naira has been hit hard by a fall in the price of oil. The official exchange rate has slumped to about N196/dollar. The black market rate, a more accurate gauge, is close to N230. Instead of allowing the Naira to devalue, the
central bank is trying to defend it by blocking imports. It has drawn up a list of disfavored goods, and will not grant foreign exchange to import them. .
Godwin Emefiele, the governor of CBN, said he wants to conserve foreign reserves (which have fallen by about a 5th over the past year and now cover only 6 months of imports) and stimulate local production. The hit list appears to have been drawn up by someone wandering around a home and a building site and randomly pointing at items. It includes Indian incense, toothpicks and wire rods as well as more obvious luxuries such as private jets.
It also includes basics such as rice and tinned fish. Nigeria does not produce enough of these things to feed itself, but no matter. The nation must be shielded from foreign sardines. Central banks usually prop up their currencies if they are worried about inflation, or allow them to devalue to depress imports and stimulate exports. .
Nigeria, by contrast, appears to be set on achieving both an uncompetitive exchange rate and higher inflation. Whereas many investors were impressed by the previous CBN governor, Sanusi, who was sacked for exposing corruption, they fret about the harm being inflicted by the current one. .
Some wonder which would be worse for Nigeria: allowing him to serve the remaining 4 years of his term or undermining the independence of CBN by sacking him.”…. thank God Buhari isn’t a social media person cuz if he sees ds, Emefiele will get d red card by tomorrow….
