ARTIFICAL FIXING OF THE FOREX MARKET WILL NOT LAST LONG: A REJOINDER TO NNPC SECURES $3BILLIONS LOAN TO STABILIZE THE NAIRA. By David Adenekan

#Iroyinominira

August 16th, 2023.



In order to sustain the value of our local currency, it is pertinent that we look inward to diversify our economy and increase the level of productivity. In this regards, it is expidient that we search for big export earnings to increase the volume of dollars in our forex market?

One question therefore is, will great export earnings not reduce the big gap in our balance of payment deficit and add great value to our local currency?

Truth be told, Tinubu's Administration is still treating this issue of the naira that is in for a free - fall with kid gloves.

Today, it started with N950 and went down to N840. However, it may go back up because, monetary and fiscal policies can only sustain the value of your local currency for a very short period except you increase the level of productivity to jerk up your export earnings.

Did Godwin Emefiele, under former President Muhammadu Buhari not do the same thing without a targeted effort to increase the level of productivity?

Are we not where we are now, because it was an artificial fixing of the forex market?

Our external reserve is very weak (Nosedived from $34 billions to $17 billions) and if what they are doing is pumping dollars to the forex market to reduce the level of scarcity of dollars, it is just going to be for a very short period.

What they are doing is borrowing money to save our local currency from free - fall or raise a bond to attract foreign investors to bring in some dollars. It is just going to be a temporary effect.

Also, what will be the interest rates on the bond or loan? Are we not postponing the evil day? Are we not going to service the interest rate on the loan on a monthly basis?

Moreover, is this debt burden placed on a country that is at the verge of economic depression not a disaster?

Our best solution is to increase our level of productivity but our biggest source of export earnings, crude oil, is a loss and not a gain at this time. This is because, our refineries are not working and more than 90% of our export earnings are from crude oil, a mono-product economy.

Yes, the economic indicators are pointing to the fact that, naira is still in for a free-fall.

Again, artificial fixing of the forex market won't last long.

Hmm, call me a sadist, a fact is a fact and the truth remains very bitter.


Time will tell.


David Adenekan Is The Editor Of Shekinah International Magazine And A Media Expert. He Writes From Chicago, Illinois.

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