He recently revealed this during an interview with the press, and Nigerians have been reacting.
According to him, the move was definitely a mistake, and the devaluation of the currency will always have a negative effect on developing nations, especially African countries that produce less to nothing.
He then expressed concern over the unabated inflation trend that has brought the economy to its lowest for some time now.
His words, “It is true that devaluing a country’s currency helps reduce imports and monies owed by the country to foreign trade partners. It also minimises direct borrowing and curtails unnecessary spending on foreign goods.”
“Judging from these standpoints every citizen on the borrowing side shares the blame for the consequences that devaluation of currency often brings – ardent poverty. A critical look at the assumptions and subsequent decisions that led to the devaluation of the Naira shows that there were flaws in the decision-making process.”
“Devaluation of currency has often had a negative effect on developing nations, especially African countries that produce less to nothing compared to developed nations. Nigeria’s decision to devalue the Naira without taking into consideration its position as a non-supplier nation was a mistake.”
“If say a school plans to raise funds by selling raffle tickets to the public at a school outdoor event and decides to devaluate the items it wants to sell, the visitors can buy more items with less money and the school will lose for reducing the prices of the items on display. This scenario might seem unrelated to foreign trade, but it does.”
“Those who thought devaluing the Naira will increase purchases from Nigeria made a huge mistake because this works only if the country has a high supply tendency or high demand for its goods abroad. It works well for China to devalue its currency because it’s the world’s leading producer of tangible goods.”
“China is a high supply nation. Nigeria does not have the same tendency as China, therefore, devaluing its currency will benefit countries buying from Nigeria and not the Nigerian economy. “If the Naira price of goods is set below a level that enables the nation to cover its costs of acquiring the goods and services sold in the country, the nation will lose money.”
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