By Ebriku John Friday
The daily pumping of dollars to strengthen the naira in the foreign exchange market by the Central Bank of Nigeria (CBN) is quite exciting and a game changer of some sort. Nigerians are no doubt basking in the euphoria of the momentary relief as the CBN governor, Mr Godwin Emefiele and his team are taking the glory for a belated action.
The economy under the management of the current administration has suffered a devastating blow due to policy inconsistency and mismatch approach to its implementation. President Muhammadu Buhari’s integrity posture and body language did not do the magic either.
Hence the naira continued to nosedive unabatedly and hitting the recessed economy hard leading to job losses, astronomical hike in prices of food items in the market, inflation, hunger and starvation, closure of businesses and the birth of a harsh business environment.
In the face of these gory and unpleasant situation, the CBN suddenly woke up from its slumber and started churning out dollars to banks and other dealers to give the Naira some competitive space.
The question now is, how long will this intervention, which can best be described as a voodoo approach last? The economy is still very much import dependent. One begin to wonder what the economic sense is in this dollar rain in a recessed economy by the CBN. Can this dollar rain, result to the much needed economic recovery?
No wonder the effect is not being felt on the prices of food items and other goods despite the release of millions of dollars to force the exchange rate against the Naira down. Though statistics are showing drops in inflation and exchange rate, the multiplier effect of these moves are yet to be seen.
What the economy needs now is the strengthening of the real sector, the manufacturing industry, infrastructural development etc. What is happening in rice revolution be replicated in other agriculture products and the mining sector. Deliberate policy should be in place to discourage importation, with the aim of strengthening the local industry to meet home needs and target exportation, thereby making Nigeria a business across Africa.
For now, the forex policy of the CBN could best be seen as a temporary measure which may not stand the test of time, economically speaking. It’s a quick fix that may not serve long term purpose.
