Experts reject continued Naira devaluation policy

By Simon Akoje

Some financial experts have criticised Chatham House’s suggestion that the Federal Government should continue devaluing the Naira, warning it could worsen economic hardship.

They voiced their concerns in separate interviews with the News Agency of Nigeria (NAN) on Friday in Lagos, opposing continued devaluation of the national currency.

Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), rejected the Chatham House advisory, stating economic fundamentals were now improving.

“We have moved past the era when the naira was overvalued and regulators maintained a fixed exchange rate.

“At that time, we all knew the economy couldn’t support such a rate. That situation is different now,” Yusuf explained.

He said President Bola Tinubu’s administration had addressed foreign exchange market distortions, bringing greater transparency and efficiency to currency pricing.

“With current reforms narrowing the gap between official and black-market rates, we should now focus on achieving market stability.

“We must not emphasise further currency depreciation, but instead consolidate the reforms already in place,” he said.

Mr Moses Igbrude, National Coordinator of the Independent Shareholders Association of Nigeria (ISAN), also dismissed the Chatham House position as self-serving.

He argued the push for devaluation was not in the interest of the country and urged Nigerians to reject external economic prescriptions.

“No foreign interest will build our economy for us. We alone must lead our economic transformation,” Igbrude stated.

He stressed that devaluation would harm the country, as Nigeria lacks an export-driven and industrialised economy.

“Our economy remains based on primary commodities, not manufacturing. Therefore, devaluation offers little benefit,” he said.

Igbrude emphasised the need for visionary leadership to reposition Nigeria’s economy for growth and development.

Mr Chris Nemedia, former Executive Director of Research at the Central Bank of Nigeria, also opposed further devaluation.

“Devaluing a currency in a non-industrialised economy only worsens living conditions.

“Since devaluation began, the average Nigerian’s standard of living has declined, in spite of the country’s vast resources,” Nemedia noted.

He urged the government to improve the macroeconomic environment to attract both local and foreign investment.

“Addressing insecurity must be a priority, as it discourages business and investment.

“Infrastructure renewal is also essential to reduce production costs and stimulate economic growth,” Nemedia added.

NAN recalls that UK policy think tank Chatham House had advised against strengthening the Naira, favouring a weaker currency to boost competitiveness.

In its report, ‘Nigeria’s Economy Needs the Naira to Stay Competitive,’ it argued devaluation offered long-term economic benefits.

The report stated that although inflation had risen under President Tinubu, letting the naira appreciate would not solve the problem.

According to Chatham House, resisting the urge to appreciate the Naira is key to maintaining Nigeria’s economic competitiveness.

It argued that the weaker Naira made Nigeria more competitive than at any point in the past 25 years. (NAN)