At the last count as of October 14, 2022, the naira exchanged for N734/$1 in the black market and still spinning downward. The Central Bank of Nigeria (CBN) had allowed the naira to float against the US dollar and other major currencies.
It is like staging a fight between the tortoise and the elephant, the result would be death. The elephant will crush the tortoise under its huge feet and the blame will go to those who staged the fight in the first place.
How did the country come to this sordid pass? Did the managers of the economy envisage these ugly consequences and still went ahead to float the naira? Or didn’t they envisage the ugly consequences? If what is happening were not envisaged, then, the chances are that the economy has been dragged into a dark alley, of which coming out would be most difficult, except there is a drastic turnaround under another administration that would promote productivity in place of consumerism.
The foreign exchange crisis has caused millions of dollars earned by the airlines to be trapped in the country. The Federal Government had introduced a fiscal policy through the CBN that restricted access to foreign exchange and transfer of funds out of the country.
Furthermore, the Manufacturers Association of Nigeria had lamented that some 272 firms have shut down within a short while due to the restriction placed on 41 items by the CBN. The items were delisted from the official foreign exchange window, leaving the companies that make use of the items to source foreign exchange from the parallel market.
More than seven years into the devaluation, Nigerians are in a better position to assess who, among the protagonists and opponents of devaluation, was right. Starting from the supporters club, it is pertinent to ask, to what extent has devaluation attracted investors? Rather than new investors rushing to Nigeria, those already in the economy are exiting.