Alhaji Sanusi Muhammad II, the emir of Kano and immediate past governor of the central bank of Nigeria (CBN), says the naira has already been devalued.
He added that President Muhammadu Buhari and the CBN were only subsidising the private sector by selling dollars to the sector at N200 as against the real market price.
“This argument (on devaluation) I think has first of all been framed wrong, it’s not an argument about do we devalue or do we not devalue. The naira has already been devalued,” he told the BBC.
“What is the value of the naira? It’s what you can get for it, what you can get for the dollar in a free market between a willing buyer and a willing seller – and it is not 197.
“All that is happening is that the government has chosen to sell its own dollars at a subsidised rate to the private sector. That’s what is happening. So, if you’re lucky, you’d get something worth N300 for N200 and you save N100,” Sanusi said.
He posited that the CBN was losing N100 on every dollar sold to the private sector, giving room for huge arbitrage.
“For every $1 billion that the central bank sells, it has transloaded N100 billion to the private sector – that’s what is happening. So you got a huge arbitrage opportunity, which either way undermines the government’s anti-corruption stance.
“You also take so much money away from states and local governments, because this is money that from oil proceeds, from PPT, royalties, that should go to education and healthcare for the poor.
“While the President is looking at the pain inflicted on the poor, by high prices of import, he also needs to look at the pain inflicted on them by taking away revenue that could go into education and healthcare.”
He however lauded Buhari for transparency, removal of subsidy and other structural reforms, calling for clarity of thinking in handling the foreign exchange policy.
“There has to be clarity of thinking. The government on the one hand says it wants to encourage domestic production, the governor of the central bank says he wants to reduce import dependence, but one would think that the way to reduce import dependence is not to make imports cheaper.
“You subsidise exchange rate – you’re making imports cheap. So you’re actually pursuing a monetary policy that undermines structural objectives”.
The revered King said he saw first-hand, the corruption perpetrated by the last administration, adding that the main perpetrators should be brought to book.
He said Buhari cannot be president forever, adding that Nigeria needs to go beyond recovering looted funds, to building institutional systems.
“The thinking that has to be done is beyond looking for these people, beyond recovering the money, beyond prosecuting them.
“What kind of institutional changes do we need to have in processes, in systems, that would make it impossible for the next president to do the kinds of things done in the past.”
On Boko Haram, he said insurgency do not end overnight, calling for strengthened intelligence, coordination and community awareness. Sanusi said “we have taught people in Kano to be able to defend themselves, if the need arises”.