Naira to rise to 2000/dollar if … - Economist

Tue, Feb 6, 2024
By editor

Economy, Featured

By Anthony Isibor

NNAEMEKA Obiaraeri, Investment Banking Executive, says that unless the supply side of dollar is fixed by tackling the physical side which is 90% the problem of Nigeria, the Naira may exchange for N2000 to the dollar.

Speaking on the interventionist approach of the Central Bank of Nigeria, CBN, to fix the continuous fall of the Naira, Obiaraeri called on appropriate agencies to go beyond the interventionist approach, which does not tackle the root cause of the matter.

He told Arise News in a recent interview that there is need to tackle the root cause of the problem, which is the dollar liquidity in the market.

The banker suggested that Nigeria should look back to history and understand the root cause of the problem before proffering credible solutions.

“Buhari inherited foreign reserves of $29bn. Between 2015 and 2023, total import volume of Nigeria was $451bn, total export received was about $406bn. Buhari and Co. borrowed over $32bn from 2015 to 2023 when he handed over to President Tinubu because as at June 30, 2015, total external debt position was 10bn dollars, Buhari left it at $42bn for Tinubu.

“Foreign direct remittances were about $168B that came into this country within those 8 years. So if you look at the net dollar inflow and net dollar outflow, there is no way naira would have lost over N600 to $1.

What Tinubu is experiencing today was a foundational recklessness that was laid under Buhari and Nigerians are not asking the right questions.

Obiaraeri explained that the N23.2 trillion that was printed by Emefiele and handed over to Buhari and Co. is at the root cause of what we are experiencing today.

He recalled that in 2018, Gov. Godwin Obaseki had cried out that printing Naira and handing over to Buhari and co without any project tied to it would lead to where we are today, and they lampooned him.

He added that although the CBN is doing its best to solve the problem by intervening, he called on President Tinubu to introduce former President Olusegun Obasanjo’s approach in solving similar issue as interventionism will not solve the problem.

“The problem lies at the root cause of it. Between 2015 and 2023 there was a bazaar in Nigeria.

“Tinubu should go back and do what Obasanjo did when he became president. Obasanjo inherited the worst economy, but he went after those that took away our dollar out of Nigeria, he called the Abacha family and they negotiated, most of those proceeds are still being enjoyed by Nigeria.

“Tinubu should develop the same political will and call the practitioners that worked under Buhari for eight years. We are talking about over $100 billion that was taken out of the economy. Because if you look at the net dollar inflow and net dollar outflow, there is no way we would have been where we are today if not for the criminality and corruption that we experienced over that 8-year period.

“Obansanjo came to power and left after 8 years and we only lost N38 to $1, Jonathan came in 2007 when the official rate was 124 and left at 199, Naira lost to dollar by N78 to $1 in 8 years.

“What has happened to the Naira in the past 9 years is what Nigerians will not wish again,” he added.

He noted that while the CBN is trying to do interventionism, we must also look at how we shore up the supply of dollar because no country with a free flow economy without managing it.

“Even China intervenes in their foreign exchange market, America intervenes. But you can only intervene when there is liquidity. Sanusi was able to intervene because there was liquidity; oil proceeds were being paid into the accounts.

In Nigeria, output was 2.5 million barrels in 2011, it came down under Buhari and has not recovered. Under Buhari, Mele Kyari on Arise TV told Nigerians that we lose 1.9 billion dollars of crude resources to inefficiency and theft every month, which is $22 billion annually and up till today, nobody has accounted for those loses, nobody has accounted for those thievery. And as long as we don’t have liquidity of the dollar which is 90% controlled by the physical side of the market, whatever the CBN is doing now is just moderating the galloping.

“If we do not fix the physical side; stop the oil theft and criminality, stop the cost of governance that is over bloated, stop the MDAs and governors from FAAC and IGR and pursuing the dollar, and provide the security that will allow Nigerians to go into productivity of this economy, I tell you, what the CBN has done is just to moderate it.

“If we don’t fix the supply side of the dollar by tackling the physical side which is 90% the problem of Nigeria, after this moderation, it will go to N2000. Mark it this day,” he added.