Experts fear the worst as Currency crisis reaches alarming levels

By Joshua Amaugo December 7, 2015 16:17

Experts fear the worst as Currency crisis reaches alarming levels

Half a year has passed since the President Muhammadu Buhari-led administration came into office and the Nigerian currency does not look pretty at all. May 2015 presented a bleak image with a low point of N218 against the Dollar but as at December 7 that figure has sunk lower to N251.

See: More panic as Naira remains in free fall

The President during his campaigns promised to make the Naira equal to the Dollar.

“It is sad that the value of the naira has dropped to more than N230 to one Dollar; this does not speak well for the nation’s economy.’’

Since then the situation stands in stark difference to what is obtainable at the parallel markets with the Euro exchanging for N214 and the Pound exchanging for N299.

Analysts have continued to forecast a bleak outlook saying the economy might not be able to negoatiate a turn around quickly enough if things continue at this rate.

See: Has Jonathan really handed over to Buhari? By Ahmad Sanni

Buhari’s failure to understand and provide lasting solution to the crises has torn the economy apart as inflation according to the Nigerian Bureau of Statistics, NBS, has soared to 9.4%.

Production and employment figures have consequently taken hits with low income earners feeling the brunt of the situation simply because their purchasing power has sharply eroded over the past few years.

Buhari according to experts has in the last six months neglected his responsibility of fixing the nation to focus on a blame game, and traversing the globe on puzzling tours.

One of such tours was a three day working visit to Paris, France, on Climate Change, with analysts questioning what exactly links both endeavours.

The Minister of State for Petroleum and President Organization of Petroleum Exporting Countries, OPEC, Emmanuel Kachikwu at the latest 68th Ordinary OPEC Meeting, lamented the low price of Brent crude at the international market.

A bigger threat remains the re-integration of Iran whose western sanctions have been lifted.

According to Reuters, there are about 20 million barrels of Nigeria’s December-loading crude still up for sale, with no buyer.

For January, very few of the 67 cargoes of Nigerian crude have found buyers.

For a nation like Nigeria which is largely a mono economy, a slight decrease in oil price has a multiplier effect down to the price of goods and services.

With realities on ground it is apparently clear that both Buhari and Kachikwu do not have the willpower to rejuvenate the economy as they are yet to fully harness other areas of export.

Presently Buhari is crossed in a dilemma, to either completely remove fuel subsidy as advocated and preached or to sustain it at the detriment of over 170 millions Nigerians.

Note, the essence of subsidy rests on Nigerians being able to buy the product at lower price, but with the incessant and un-abating fuel queues, Nigerians are buying the product at three times the normal price which raises a question of who is benefiting; Nigerians or marketers?

See: Fuel Scarcity: Nigerians disagree with Buhari over subsidy claims