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20 February, 2016

Naira has been devalued





Naira has been devalued - Sanusi Nomso Obiajuru Yesterday 125813 Share on Facebook Share on Twitter Send email – Emir of Kano Muhammadu Sanusi II believes Naira has already been devalued – Sanusi’s remarks comes against the backdrop of President Muhammadu Buhari refusal to devalue the currency of Nigeria – Sanusi says FG needs clarity of thinking in the handling of the foreign exchange policy The argument about devaluation of naira is misunderstood because the naira has already been devalued, this is according to the Emir of Kano Muhammadu Sanusi II. Speaking with BBC Africa on Business Report, Sanusi was quoted saying: “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. “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. “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.” READ ALSO: Emir of Kano criticises Buhari over exchange rate policies Share on Facebook Share on Twitter Emir of Kano Muhammadu Sanusi says the argument about devaluation of naira is misunderstood as naira has already been devalued READ ALSO: I gave judge N225, 000 for burial not bribe – Tarfa tells court Sanusi also commended the President for transparency, removal of subsidy and other structural reforms. According to him, the federal government needs clarity of thinking in the handling of 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 subsidize exchange rate – you’re making imports cheap. So you’re actually pursuing a monetary policy that undermines structural objectives,” he said. On the corruption perpetrated by the last administration, Sanusi said that the main perpetrators should be brought to book. He said Buhari cannot be president forever and that Nigeria needs to go beyond recovering looted funds, to building institutional systems His words: “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. He however called for strengthened intelligence, coordination and community awareness. He said: “We have taught people in Kano to be able to defend themselves, if the need arises.” Sanusi’s remarks comes weeks after President Muhammadu Buhari  rejected calls to devalue the currency of Nigeria. According to Buhari, he would not “kill the naira.” Meanwhile, the naira has finally strengthened against the US dollar after weeks of free fall on the parallel market. On Friday, February 19, the currency gained N360 against the American dollar what means that the pressure on the national currency has eased. However, some unofficial traders sell it at N370 per dollar and buy at N367.





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