While it may be possible for the naira-to-dollar exchange rate to rise in the coming days, expecting the rate to drop to as low as ₦400 may not be realistic, considering a few challenges that the government is yet to resolve.
One of which is electricity.
A former Deputy Governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, has criticised the notion that the naira will stabilise at ₦400.00 to the dollar.
Basically, the political economist deems the notion as unrealistic.
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Moghalu expressed his viewpoint through a series of posts on his X account on Sunday.
He wrote: “Those who want the Naira to be ₦400.00 to the $ are living in a dream world.
“Aside from the negative impact of speculative attacks on the value of the Naira, the exchange rate will (and should) reflect its market value in reality, not the artificiality that the Emefiele era sought to maintain to please economic illiterates in political power.
“That artificiality created room for massive arbitrage by speculators which bled the economy.
“Nigeria does not (yet) have a productive export economy.
“That’s the heart of the matter.
“And we do not have $100 billion in foreign reserves. So, on what basis would the Naira forex rate return to some fantasy land soon?”.
Nigerian Entrepreneurial Spirit
Also, Moghalu said it will take time to regain or achieve full investor confidence such as we had when the rate was ₦150-165 to $1.
“The sooner we focus on creating a value-added manufacturing export economy that earns forex beyond oil in real and significant terms, the better.
“Key to this is the electricity problem in which we are at less than 4,000MW of generation for a population of 200 million for decades.
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“South Africa with a population of 60 million generates 50K MW, and Brazil, with population slightly larger than Nigeria, generates 181KMW.
“So take power to 20K megawatts and you will see what the Nigerian entrepreneurial spirit is capable of.”
