For fear of worsening an already shaky national economy, Nigerian President Muhammadu Buhari has refused to officially devalue the nation’s currency. Buhari maintains that while devaluation of the Nigerian currency has its perks, it will do more harm than good to the living conditions of the people whom he says “have suffered enough”.
When the president advised the people to be ready for hard times, he perhaps meant it in a realistic way. By his rejection of the International Monetary Fund (IMF) to further devalue the naira, Buhari has shown empathy and concern for the poor majority whom the currency devaluation will grossly affect. He insists that devaluation of the Nigerian currency is next to killing it and so long as the average Nigerian will not benefit anything from the procedure, the idea is not a welcome development in Nigeria till further notice.
This decision of the president’s coming from the aspect of the people’s standard of living is indeed thoughtful. In a capitalist world where the rich keep getting rich and the poor get poorer, devaluing the Nigerian currency without due consideration of the poor majority will be callous.
As it is, Mr President is toeing the self-sufficiency line by sharing his interests in diversifying the economy by way of producing what we need and establishing more industries which by extension will tackle unemployment to a commendable degree. To the best of his knowledge, devaluation will destroy the economy. These are his reasons:
– It will make importation very expensive
– It has a very strong potential of causing inflation
– Consumer goods will be expensive and in direct translation will make life harder for the average Nigerian
As a matter of fact, devaluing the nation’s currency is a double edged sword since it can as well favor Nigerian students in diaspora and export-oriented businesses – making it cheaper and creating competition.
Despite that, Mr President is not pushing through with it because Nigeria has not fully succeeded in diversifying her economy, it will cause an imbalance in the trading sector if export businesses gain while the gradually growing import-based industries struggle with their businesses.
It would have been fair or easier if the nation’s manufacturing sector has grown to a stable stage but at the moment, cannot efficiently cater to the needs of the people, thus will make the low and middle class citizens to suffer greatly. As the President rightly pointed out, only developed nations can afford currency devaluation because they can sufficiently produce the goods they want and do not depend so much on the importation of goods. Based on this, Nigeria is not ready for that kind of risk because we still largely import most consumer goods.
Addressing this issue, the President also vehemently expressed his reservation for the fuel subsidy scheme of the previous administration, saying it was bogus. In the same way, he reassures Nigerians of not intending to play games with the N18, 000 minimum wage even though he is aware that some states are battling hard to meet up with the obligation.
The incessant inflation is doing a lot of visible harm to the nation and Buhari’s stand on the IMF’s call to devalue naira is for the good of the nation, people and economy; it will prevent further inflation of the naira.