CBN creates artificiality to please economic illiterates in political power  – Moghalu

…Insists Naira can’t be N400 to Dollar

By Abiodun OBA

The Central Bank of Nigeria, (CBN) is alleged to have created artificiality that it sought to maintain to please economic illiterates in political power at the time.

A former deputy governor of CBN, Kingsley Moghalu, posited in a statement via his X handle on Sunday.

The economist insisted that artificiality created room for massive arbitrage by speculators which bled the economy, adding that the exchange rate should reflect its market value in reality.

Moghalu suggested that the sooner the country focused on the creation of value-added manufacturing export economy that earned forex beyond oil in real and significant terms, the better.

He asserted that those expecting the Naira to be N400 to the Dollar are living in a dream world.

Moghalu said, “Those who want the Naira to be N400 to the $ are living in a dream world. Even discounting for the negative impact of speculative attacks on the value of the Naira, the exchange rate will (and should) reflect its market value in reality, not the artificiality that the central bank sought to maintain to please economic illiterates in political power at the time.

“That artificiality created room for massive arbitrage by speculators which bled the economy. Nigeria does not (yet) have a productive export economy. That’s the heart of the matter.

“And we do not have $100 billion in foreign reserves. So, on what basis would the Naira forex rate return to some fantasy land soon? It will also take time to regain or achieve full investor confidence such as we had when we were there (and the rate was N150-165 to the $.

“The sooner we focus on a painstaking creation of value-added manufacturing export economy that earns forex beyond oil in real and significant terms, the better.

“Key to this is the electricity conundrum in which we are at less than 4,000 megawatts of generation for a population of 200 million for decades now.

“Take power to even 20K megawatts (let’s not talk of 50K for South Africa’s 60 million population or Brazil’s 181K megawatts for a population only slightly larger than Nigeria) and you will see what the Nigerian entrepreneurial spirit is capable of,” he said.

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