Redenomination of naira: The only option to achieve meaningful exchange rate in Nigeria -By Comr. Ahamefula Israel

Historically speaking the problems with Nigerians economy could easily be traced back to September 1986 when the then head of state Gen Ibrahim Babangida introduced the set-firm aimed at finding the real value of the so called over valued naira in the international market.

That attempted according to experts then was made to inject more money for domestic purposes among other things but little did Nigerians know that they were heading for an intractable economic mayhem. Indeed no sooner than the Structural Adjustment Program (SAP) was introduced with its attendance consequences than the naira has refused to find its real value at the international market alongside the dollar, pounds and other brother and sister currencies in the world.

In the same direction and precisely in August 2007, the den Central Bank Governor Professor Chukwuma Soludo; the pragmatic Igbo born economist alerted Nigerians of the new fiscal monetary policy aimed at Suring-up the naira to a reasonable level. Under this plan of action, the naira will revert to its pre 1986 days of about One Naira twenty five kobo (₦1.25k) to 1United States dollars. Also, the highest currency denomination will be twenty naira (₦20), under the same arrangement, two thousand (₦20000) will equate to twenty naira (₦20) while fifty thousand (₦50000) will equate to fifty naira (₦50). This means that products sold at two thousand (₦2000) will be sold at twenty naira (₦20) in the new naira value. The only problem with the Soludo’s option was that it was made to court down inflection drastically without empowering the economy.

One would have expected that production level will increase manpower and infrastructural based improved upon; while mass education would receive a boost. Though it was above background inview, it was unfortunate that the redenomination of the naira did not go down well with Nigeria’s and the federal government led by Late Alahji Umaro Yaradua who insisted that the new monetary policy must be dropped. Presedent Yaradua further said that “Redenominating the naira means carrying out a surgical operation on a person that is not sick” this was to say the least most disappointing. The only thing Prof Soludo was accused of committing then was that he did not inform the presidency before making the policy public. Now that the present federal government led by President Muhamed Buhari is very desirous as to bring back the economy on the part of honor, the Central bank Governor Mr.Goodwin Emefele and the Minister of finance Mrs Kemi Adeosun should do everything to assist Mr. President positively in this regard.

Indeed the naira has suffered drastically in the international market in recent times reaching a whooping sum of three hundred and sixty (₦360) to one us dollar and Four hundred and twenty naira (₦420) to one pounds. This is scandalous for a country that regard itself as a giant of Africa. Infact, what Prof Soludo proposed in 2007 would stand a test of time if properly evaluated which may be synonymous with what most advanced countries have done over the years to save their currency from total collapse. For example between 1918 and 1923 when Germany suffered its worst economic saddle with attendant galloping inflection. The German government intervene to safe the German mark from further devaluation. Argentina had revalued its currency four times, in 1970, 1983, 1985 and 1992. Brazil has done same seven times to suits its needs. Also Mexico, China, Ghana had revalued their currencies according to their needs. The national economic council should rise up to their occasion to assist if countries have silently tackled their economic problems without attracting on several international comments. Why must Nigeria case be different? Indeed, an economy that exchanges her currency with another in upwards of hundreds of naira is sick and needs a surgical operation. While this is going on, The Buhari led Government should not lose sight of the face that we need an increased level of industrialization and production. The provision of infrastructure and adequate attention giving to the death of competent manpower to complement Soludo’s economic agenda for this great Country.

Scripted by:
Comr. Ahamefula Israel
Senior Advocate of Nigerian Students

Ahamefula Israel, a former Students’ Union President, Abia State University,Uturu writes from Enugu. e-mail:anyameleisrael@gmail.com