President Muhammadu Buhari has reinstated his resolve not to devalue the naira despite the naira sharp fall against the dollar on the black market and rising inflation, adding that Nigeria would not benefit from the its devaluation.
Speaking at a meeting with members of the Council of Retired Federal Permanent Secretaries, President Buhari said that he still held the conviction which motivated his principled resistance to devaluation in his first tenure as Head of State.
He said resisted pressure from the IMF and World Bank to devalue the naira in his previous tenure and was still yet to see the benefits it would bring. “The naira remained strong against the dollar and other foreign currencies until I was removed from office in August 1985 and it was devalued,” the president said in an address to retired civil servants.
“But how many factories were built and how many jobs were created by the devaluation? That is why I’m still asking to be convinced today on the benefits of devaluation,” he said.
The official exchange rate against the dollar was pegged at 197 in February last year but a foreign exchange shortage has seen the naira hit record lows on the parallel market in the last few months. It traded at 320 on the black market on Friday.
In other to protect foreign exchange reserves, the Central Bank of Nigeria had introduced policies that has prevented local companies from getting foreign currency to fund essential imports such as food or machinery spare parts.
The apex has resisted calls from the International Monetary Fund (IMF) and investors to ease the restrictions — a stance supported by Buhari, who has previously likened a devaluation of the naira to having it ‘killed’.
Inflation rose to a near four year high of 12.8 percent in March, up from 11.4 percent the previous month, which was driven by a rise in food prices. Foreign stock and bond market investors have become reluctant to put money into Nigeria because they assume the naira will eventually have to be devalued.