Bloomberg and Devaluation of the Naira

 

The Central Bank of Nigeria have said that they want to redesign the Naira to force those hoarding the Naira to make it available in the system.

This move raises some questions. If you

value a thing, you hide it. Is the Naira valuable?

The CBN wants to fight crime by making criminals bring in their loot in the open. Does a leopard change its spots?

During the first coming of PMB, he changed Naira. What has changed?

I have chosen to disagree with the CBN in describing their move as redenomination and not redesign. What is the difference?

In redenomination, a country chooses to remove some zeroes from its currency for some reasons.

For instance when the value of Naira is so low that higher denominations like N200, N500 and N1000 are the ones commonly used and the lower denominations cannot buy little things, then CBN can then turn N500 to N5 and N1000 to N10 and then N100 and other lower denominations would no longer be in use.

Consequently, Nigerians can then say that N5 is equal to $1.

The CBN have not said they want to redenominate the Naira like Ghana did to the Cedi. No.

But by introducing, higher denominations like N2000 and N5000 the CBN are only doing it piecemeal.

To buttress my position, Bloomberg have predicted that the CBN is planning to devalue the Naira on a large scale.

It is really sad. The Chinese are being begged to strengthen their currency because, Devaluation which is the reduction in the value of a country's currency in relation to that of their trading partners, makes exports cheap and imports expensive.

Nigeria's export base is weak compared to China so Nigerians will pay more for imports while exporting next to nothing.

Chinese are flooding the world with their cheap exports. Nigeria's major export is priced in dollars, no wonder our budget is based on dollar price of Crude Oil.

Perhaps, Government is trading on the misery of Nigerians for with less dollars they get more Naira to fund the budget.

So sad. While Nigerians pray for Naira to get strong, the government would want the opposite.

Of what use is our independence if a national government thinks like a colonialist?