THE DEVALUATION OF NAIRA SCHOOL has argued
that the current official exchange rate of N199 to
$1 by Central Bank and the wide gap of N340 for
$1 Exchange Rate in the Black market is
unsustainable and bad economic policy. This school
of thought has adduced the following reasons as
supporting their demand for devaluation of Naira.
1. That devaluation shall trigger multiple in flow of
Forex outside our Crude Oil sales.
2. That Devaluation will attract foreign investments
into our economy.
3. That Devaluation will discourage huge demand
of Forex on Central Bank.
4. That devaluation will reduce the gap between
the official-rate and black-market rate thereby
eliminating round-tripping in the system (criminal
diversion of sourced official-rate to black-market
The aforementioned reasons though convincing,
over-looked some inherent dangers and
dislocations within our internal harmony as
1. Any attempt to devalue the Naira will
automatically shoot up the prices of Petroleum
products to at least N250 per litre of Petrol. Please
further be informed that at N250 per litre of Petrol
and the current poor earnings in the International
Crude Oil Market, Nigeria cannot afford to subsidize
these products. This will spark off catastrophic
consequences that this new government cannot
2. The Devaluation School of thought is yet to give
us clear figures of the expected Forex earnings
outside Crude Oil sales that will be triggered by
devaluation of Naira. Please in clear figures, what
are the expected earnings of Forex outside Crude
Oil sales? These touted inflows are sincerely so
negligible to make up for the chaos increased
pump price of Petroleum products will trigger.
3. Can we say emphatically that once our Naira is
devalued, there will be multiple inflow of foreign
investments in Nigeria? The answer is capital “NO”.
In a nation grappling with energy capacity of 5000
Megawatts, productions within our economy are
simply not affordable. The cost of doing business in
Nigeria is rocket high due to poor electricity supply.
Security of lives and properties are equally a
herculean task. The very day we get our country’s
security network in order and equally enhance our
electricity generation to at least 25000 megawatts,
foreign investors will flock to our shores like
locusts. Nigeria as the largest market in Africa with
over 200 million people shall become investment
haven once our Leaders can lead us out of darkness
to glorious new dawn of light.
4. It equally begs the question to suggest that
devaluation will automatically translate to reduced
demand for Forex in Nigeria. As a consuming
Nation with insatiable appetite for importation,
even if you Devalue Naira to N700 to $1, Nigeria
will still pile up demand for Forex even for the
importation of toothpicks.
THE WAY FORWARD FOR MR PRESIDENT.
I was emotionally touched when President Buhari
before United Kingdom audience told the whole
world that “Nobody has sufficiently convinced me
on why I should murder the Naira”. Permit Mr.
President to add “Don’t dig this Open grave for
Nigerian economy through this ill timed
devaluation of Naira.” Any devaluation of Naira now
shall be against APC Manifesto. The advanced
economies stoking this fire of Devaluation of Naira
through their proxies will never disclose to us their
government’s interventions during Recessions and
Depressions. They will not tell us the volume of
subsidies to their farmers. They will not tell us the
initial processes and level of their government
interventions in transiting their economy from
developing to advanced. They want us to behave
like them and play to the dictates of open market
variables not minding the dislocations such
attitude will trigger in our local environments.
President Buhari is a blessing to Nigeria at this
critical period of our history (Remember the God
Factor at the beginning of this article). At a time
when Nigerian leaders with thieving fingers
allegedly siphoned $2.1 Billion meant for arms
purchase to private pockets, Buhari is a blessing of
leadership at the right time.
At a time when 80% Federal projects are
abandoned after contractors in collaboration with
thieving leaders have collected 90% of contract
fees, Buhari is a blessing of leadership at the right
At a time when the costs of running Federal
Government (both Executive and Legislature) can
sufficiently service the Budget needs of three
African nations, Buhari remains a blessing of
leadership at the right time. Having sought to lead
Nigeria in four previous elections since 2003, some
have argued that President Buhari could have been
President during our Oil Boom. I was quick to
remind them that Davids of any nation arise to
rescue such nations when Goliaths have defied it.
Now is time for godly leadership over Nigerian. In
ignoring devaluation of Naira, the following steps
may be key:
1. Eliminate waste as noted above and drastically
bring down the cost of governance in our country
which is too high and unaffordable now. The
Federal Executive should be able to administer
Nigeria within the limit of maximum 12 Ministries/
Parastatals appointing 12 Ministers with Portfolio
and 24 Ministers without Portfolios to satisfy the
demand of Section 147 of Nigerian Constitution.
The 12 Minister with Portfolios should be shared
out two per a geographical zone while the 24
Ministers without Portfolios shall function as over
sight Ministers on assigned supervisory roles. The
cost of legislative governance should also be
drastically pruned down. The present cost going to
National Assembly is scandalous and unaffordable.
The current Budget before the National Assembly is
UNBuhari. It is noteworthy to observe that Mr.
President has started addressing this anomaly with
some disciplinary actions against the Officials that
allowed this national embarrassment.
2. The Central Bank should maintain and strictly
adhere to the current official Exchange Rate of
N199 to $1 applying the economics of “Scale of
Preference” and “Opportunity Cost” to the high
Forex demand. The available monthly $1 billion
being chased by over $3 Billion Monthly Forex
demand should be disbursed in preference of the
needful and forgoing alternatives. CBN should
adequately block all leakages in Forex
disbursement possibly eliminating fraudulent
diversion of funds from official market to black-
Nigeria should now learn how to cut her coat
according to the available clothe and then cut it
according to her bloated appetite size when the
price of Crude Oil rebounds in the International
Barr. Okonkwo Peter Chigozie – OHAMADIKE
THE DEVALUATION OF NAIRA SCHOOL has argued