An economist is raising the alarm over the operations of black market operators, highlighting how their operation is reducing the value of the naira.
The exchange rate of the naira to the dollar in the black market is just about ₦250 short of getting to ₦2000.
Hence, the economist wants the government to do the needful at this very moment.
A professor of economics, Sam Olofin, believes that the rescue of the naira from the hands of powerful black market operators will end naira decline.
He described the black market operators as “monsters” destroying the value of the local currency.
He was formerly a member of the Monetary Policy Committee (MPC) of the Central of Nigeria (CBN).
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He made the call while speaking at the 2024 public lecture of the Nigerian Economic Society, on Thursday in Ibadan, Oyo State.
The event had the theme: ‘Recent Developments in the Nigerian Foreign Exchange Market: Issues, Options, and the Way Forward.’
We Have Created Monsters In Black Market Operators
He said: “The value of the naira against major foreign currencies, especially the dollar, has continued its free fall and stands at over ₦1,500 to a dollar.
Our attention should be focused on this powerful segment of the market, the so-called black market.
We have succeeded either deliberately or unwittingly in creating a monster that has been well-protected,” Olofin said.
“It is either we bring this monster under control or allow it to strangulate the naira.”
“As things stand at the moment merely wishing that the ‘willing buyer and willing seller’ model would do the job would be a mere fantasy,” he said.
If the naira must be saved from imminent collapse, the time has come to rescue it from “the hands of these powerful operators in the foreign exchange market”, he insisted.
He urged the federal government and other key economic stakeholders to intervene urgently to prevent the collapse of the naira.
“The immediate issue of concern is how to stabilise the value of the naira and ensure the effective operation of the foreign exchange market,” Olofin said.
Challenges Of The Economy
Nigeria’s fragile economy is plagued with high inflation and rising poverty, heightened by the removal of petrol subsidies and the devaluation of the naira.
The naira has lost nearly 70% of its value since the shift to a more liberalised foreign exchange market last June.
This has made it one of the worst-performing currencies globally, in January, the naira lost 21%, touching a record low of ₦1,530/$.
Also, the President of NES, Adeola Adenikinju, said: “The government, and the CBN, have reacted to the persistent devaluation of the naira with a rash of circular policies.
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“At times, we worry that the effects of a particular policy have not been assessed before others are quickly thrown into the mix.
This action tends to add to uncertainty and the flight to safety postures of economic agents, who continue to hold dollars outside the banking system”.
