Time to let the naira float

Most Nigerians would admit that the just ended Year 2016 was the most difficult year since the return to civil rule in 1999. As acknowledged by the leadership of the Nigeria Labour Congress (NLC), it was indeed a terrible year for Nigerian workers and pensioners.

Not only did thousands of Nigerians lose their jobs in the key sectors of the economy, particularly banking, those who were lucky to remain on their jobs had a bleak December simply because most companies could not afford to pay salaries. We are already in 2017 but thousands of workers are being owed several months of 2016 salaries.

There have naturally been many suggestions on how to solve the current economic recession in the country and thus prevent it from becoming a depression. It has been suggested that the Federal Government should change the country’s economic team and appoint more competent hands, and that it should reduce recurrent expenditure. These are sound suggestions, but one key solution to the recession is to undertake a review of the country’s fiscal and monetary policies. In this regard, the Federal Government is advised to allow the Central Bank of Nigeria to do its job, rather than  fixing the exchange rate of the dollar to the Naira.

The Naira should be allowed to find its feet on the international market, such that the difference between the black market and regular market rates of the dollar will eventually be less than five percent. As things stand, with government attempting to fix the exchange rate, savvy businessmen and women and those in government are simply trading in the dollar under the guise of importing non-restricted items and, for those in government, the Basic Travel Allowance provides a ready source of free money. They take the dollar allocated to them and sell it at the black market rates, thus making a lot of money.

If the naira is allowed to float properly, Nigerians in the Diaspora will be encouraged to repatriate their money home and so there will be enough foreign exchange to lubricate the system, and Nigerians will smile once again. Nigeria can only be great when the naira is subjected to the forces of demand and supply

Oluwafunke Oni

Ilorin, Kwara State