Emir of Kano, Lamido Sanusi Lamido, has again weighed in against the the Federal Government policy of trying to maintain the value of the naira.
For Sanusi – a former governor of the Central Bank of Nigeria, the drawbacks of the policy “far outweigh its dubious benefits.”
Economists are divided on the policy of currency valuation with majority standing adopting policies where the market forces of demand and supply determine currency value.
That basically will remove the distortions of dual exchange regime, which is harmful to the economy.
But President Muhammadu Buhari insists that the currency must be held in check unless the value will go berserk.
Buhari told the BBC last week that he was not convinced of the need to “murder” the naira.
The falling oil price has put pressure on his currency policy, which has resulted in steady depletion of the country’s foreign reserves.
The CBN a few most back resorted to rationing of forex by drawing a list of goods which would not access forex from the CBN window. This was meant curtail demand for the dollar.
The authorities are keeping the official naira rate at around N200 to the dollar, but the black market rate is over N300.
The government relies on oil exports for vital foreign exchange and the declining price means there are fewer dollars in the country.
“The government does not have the reserves to keep the exchange rate at its official level in the market,” the traditonal ruler told the Financial Times.
The policy has “never worked” wherever it has been tried, he added.
