Reps Want Policy to Tackle Incessant Naira Devaluation

By Dipo Olowookere

The Central Bank of Nigeria (CBN) has been asked to design a policy aimed to tackle the incessant Naira devaluation at the foreign exchange (FX) market.

Since the inception of the present administration of President Muhammadu Buhari in 2015, the local currency has lost a huge value against the United States Dollar, moving from around N200/$1 to N410/$1 at the official exchange rate market.

For the House of Representatives, this is not acceptable, especially as the value of the domestic currency at the unregulated segment of the FX market is at N502/$1.

At the plenary on Wednesday, the lower chamber of the National Assembly expressed worry about this issue, noting that if left unchecked, it could further put pressure on inflation, which stood at 18.12 per cent as at April 2021.

A member of the House, Mr Bamidele Salam, had moved a motion to ask the CBN to formulate economic policies to cushion the rapid fall of the Naira against the Dollar.

In the motion seconded by Olododo Cook, the lawmaker expressed alarm at the statistic of the rapid fall of the Naira in such a short period, especially when compared with the appreciation gained by the currencies of some African countries like Ghana and South Africa within the same period.

He specifically said while the value of the Nigerian Naira relative to the US Dollar has declined by 9 per cent in the last 6 months, the South African Rand and Ghanaian Cedi have appreciated by 11.4 per cent and one per cent respectively.

Mr Salam argued that Nigerians are aware that that the devaluation of currencies is often used for economic advantage, but he was concerned that the continued devaluation of the Naira will cause economic inflation which affects the socioeconomic wellbeing of Nigerians, especially those whose businesses directly benefit from a strong Naira-Dollar ratio.

In their contributions, the other lawmakers agreed that the apex bank must urgently put in place a framework that will address this issue holistically.

To achieve this, the green chamber directed its Committee on Banking and Currency to work with the central bank on this policy and give feedback in two weeks for further legislative action.