How Naira Devaluation Caused Nigeria’s Economy To Fall Into Recession

naira devaluation caused recession

Sept 5, 2016 – Opinion: How Naira Devaluation Caused Nigeria’s Economy To Fall Into Recession…Why Buhari Is Part Of The Problem

An opinion article by top commentator Endure

It is only a brainwashed f**l misled by the APC that will accept that Buhari is not part of Nigeria’s problem. Buhari has further impoverished masses in the country by adopting a completely outdated policy that has further sent our poor economy deep into recession.

One of the economy damage and financial set back decision Muhammadu Buhari made, is the heeding of call from the IMF to devalue Nigerian currency. The simple truth is, that the decision is pathway to economic disaster.

EFFECT OF NAIRA DEVALUATION ON NIGERIA’S ECONOMY

The current administration devaluation of our currency is counterproductive. The government around the world often lower their currency rates in order to benefit from the lower value of the national currency.

And lower currency value encourages exports and discourages importation thereby improving the country’s trade deficit and imbalances. Nigeria is known worldwide as a country that is fully reliant on crude oil revenue.

Nigeria’s oil revenue account for 80 percent of our yearly national income.

Based on this fact, currency devaluation in the country when we have no other raw materials and finished goods for the foreign marketers to come and buy at a cheaper rate and export to the international market is suicidal from the stand point of economic analysis.

In the absence of the availability of other raw materials and finished goods to be exported to other countries, the currency devaluation therefore serve no healthy purpose to our economy.

On the contrary, the effect of devaluing our naira has been tragic by sending our poor economy down into recession. The scale of damage caused by the administration failed monetary policy adopted is unprecedented causing an all out outcry from the masses in the country.

The low rate of our naira or the depreciation in the value of our naira compare to dollar or other traded currencies that is recognised in the international financial market has nearly led to a total halt of many importation of goods and raw materials into the country as soon as the current administration took office.

Due to this devaluation, many companies can no longer sustain more production thereby leading to massive retrenchment and layoff of workers back into the already filled labour market.

Adding to this woe, many firms have moved to other countries that has bearable currency rates to support the growth of their businesses leaving an increasing number of our youths in the country without job.

Trillions of naira from big firms in the country have been lost to the irrational currency devaluation as the example of Dangote have shown recently.

Importation of pharmaceutical products and raw material for it production in the country is now harder than ever due to the unfavourable devaluation our naira resulting in deaths of many sick patients both in hospital and at home who can’t afford what is now an expensive drugs to cure their health challenges.

There is now an unbearable high cost of living today in the country due to this failed currency devaluation policy of the present government.

It is only a shortsighted individual who lack understanding in terms of economy who will give 100% credence to the Current administration performance.

Lamido Sanusi a highly placed Nigerian who is part of APC member came out boldly to point to the fact that the administration has not been sincere for citing low oil prices for the slow recovery of our economy and enumerated ways to emerge from the current recession.

If he could do that, it is therefore incumbent on every genuine APC or pro APC member who want the smooth run and recovery of our economy to accept that the current administration has also caused great harm to our economy.

Rather than blindly and relentlessly pointing accusing finger to the past administration, people should rather focus on the present economic challenges and how the current administration has also blighted the lives of the masses with failed economic reform.

I want to reiterate the fact that highly knowledgeable people in the country cannot and will never be deceived by the empty slogan and mantra of change by pro APC group in the country.

[Opinion article written by Endure]

6 thoughts on “How Naira Devaluation Caused Nigeria’s Economy To Fall Into Recession

  1. There is one thing in economic called the demand and supply of commodity which directly affect the value of any currency. The values of all currencies in the globe like the Naira, dollar, chen, Britain Pounds, and other major currencies are determined by export and import ratio. In a messy nation like Nigeria that is mainly oil dependent, it means that naira value is determine by the price of crude oil in the international market and not by IMF nonsense factor. Nigerian economy is an oil based economy, our main export in exchange for other currencies is crude oil whose price has been reduced by over 70% compares to what it was sold for in 2010 to January, 2014 before the recession hit. Investment in Agriculture by individuals, local, state, and federal government will help or hedge our economy by increasing our export capacity from only oil based economy to cash crops based such as cocoa, rubber, timber, coffee, and other goods. Before the oil exploration, Nigerian economy is powered by agriculture and nothing else. Great leader like Chief Obafemi Jeremiah Awolowo build the Southwest region and other infrastructures, offered free education to his people, opened the first TV station in Africa, and provided his people with great health care from revenue from Cocoa plantation. Neither IMF, PMB, World Bank or twisting facts can currently change Naira value, if crude oil price goes up in the international oil market, naira will appreciate, but if it keeps falling, naira will depreciate further. No force can change that economy facts. However, other oil producing nations are smart enough to saved funds for the raining days when there was oil boom and revenue surplus, what did Jonathan did with billions of dollars in surplus from oil revenue when it was sold at $150/ barrel? My people, he embezzled and looted all the surplus funds from oIL boom. When OBJ and Yaradua handed over power to criminal Jonathan, they left him with billions of dollars in foreign reverse. But Jonathan left an empty reserve with billions of dollars of foreign debts to PMB despite the fact that he realized far more revenue from oil surplus than any president in Nigerian history. These are not brainwashed but facts. We are here today because of looting, mismanagement, misappropriation, money laundering operations, and corruption of vagabonds, crooks, criminals and looters in power for over 40 years, but Jonathan is the cause of our current economy hardship and poverty. This is the true that many haters don’t want Nigerians to know. Shekenah!

  2. @ENDURE, I OWE you another drink. The truth about our national dire straits today can only be heard, not from a PDP or an APC polititian or supporter, but from the uninvolved observers among the masses. The summary of it all is that PMB came and worsened what he already met bad. Anybody who says it wasn’t bad and decayed when he entered is maintaining a politically slanted outlook.

  3. Kudos to you my poster. I have said it for the upteemth time that those in the present government are parochial and myopic in their sense of reasoning. That is why instead of fixing ‘the mess’ those in Jonathan’s regime put them to, the are bent in witch hunting to cover up their lapses. Yes, is good to fish out the culprits and clip their wings. The question is, are they going to spend the whole four years of their tenure on fishing out scape goats? In the company where I work, there are no rooms for mediocres. The moment you lose your relevance, you will be sacked. That is why many of us go as far as travelling abroad attending courses in order to improve on ourselves. Such measures should be applied in governance. Once those in government lose their relevance, people should agitate for replacement.

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