EFCC Chairman, Abdulrasheed Bawa, said that dollar rate will soon reduce to 200 naira per 1 dollar regarding the naira redesigning proposed by the CBN. Aside from the CBN enacting the redesigning policy, the EFCC is going about arresting Bereau de Change operators, and monitoring perceived politicians who have large sums of Nigerian and foreign currencies stacked somewhere. The crux of this post now is how this EFCC and Nigeria’s monetary policy will affect foreign exchange rate?
Will the drive of the EFCC and the CBN’s naira redesigning affect the dollar rate?
President Buhari’s Economic and Monetary Policy
President Buhari’s government since inception have carried out lots of economic policies, which have had varying effects on the economy. One of the most popular policies is his monetary policy on safeguarding the naira.
Earlier in his administration, during the first recession, IMF, and other world economic bodies, advised the Nigerian Government to float the naira. To the IMF, floating the naira will do Nigeria better, and do a lot of good to the economy. For the Nigerian Government, floating the naira was tantamount to killing Nigeria’s economy.
Thus, Nigeria put in lot of money and policies protecting the naira. However, due to the double recessions during President Buhari’s administration, the naira still got devalued. From 200 naira per dollar it rose to 450 naira per dollar, official rate, in 2022. The black market rate is 780 naira at the moment.
What are some of the monetary policies enacted by Buhari’s Government to protect the naira. Some of these policies include:
1. The elimination of Black Market rate and scrapping of Bureau de Change.
2. The introduction of the Uniform dollar rate price as defined by CBN official rate.
3. The Protection and Safeguarding of the naira in different ways. Hard measures were enacted as well as flexible measures.
4. The involvement of EFCC in strongly tackling multiple exchange rate caused by the activities of dollar hoarders and the BDCs operators.
5. Strict regulations over commercial banks as regarding the issue of exchange rate and supply of dollar to the economy.
These exchange and Nigerian monetary policies, in President Muhammad Buhari’s Government, have had little or no effect. The naira still got devalued greatly.
Now, will this recent policy and statement of the EFCC boss work out? Will the naira redesigning policy of the CBN meet the intended objectives?
EFCC and Nigeria’s Monetary Policy
The Verdict: Can the Naira Appreciate to 200 naira as against 1 Dollar as stated by the EFCC Boss?
The statement of the EFCC boss cannot work out. There’s no way the naira will appreciate to 200 naira per dollar. Even with the use of force and tackling of politicians and BDCs’ operators, the naira cannot go down to 200 naira in the official or black market.
At best, the naira will hover around 600 to 800 naira per dollar in the black market, and 450 to 470 in the official market.
Nigerians are not patriotic enough to offload their dollars and other foreign currencies to effect the needed change. So, even if the naira is redesigned, many hoarders of the naira will convert their money to dollars.
The money in circulation and in the banks will increase. This means better access to loans for business, and a strong capital financial system. However, it’ll do little or nothing to solve Nigeria’s foreign exchange crises.