Oil price slump: Devaluation will kill Naira, Buhari insists

*President Muhammadu Buhari of Nigeria.

*President Muhammadu Buhari of Nigeria.

*Says it’ll bring hardship on poor Nigerians
*Says BDCs are scam, drain on economy

Oscarline Onwuemenyi

29 January 2016, Sweetcrude, Abuja — President Muhammadu Buhari has declared that he was yet to be convinced that Nigeria and its people will derive any tangible benefit from an official devaluation of the Naira.

The president who was speaking at an interactive meeting with Nigerians living in Kenya, noted that while export-driven economies could benefit from devaluation of their currencies, devaluation will only result in further inflation and hardship for the poor and middle class Nigerians because of the country’s import-dependent economy.

He added that he has no intention of bringing further hardship on the country’s poor who have suffered enough already.

With decreasing revenue from crude sales brought about by a global oil price slump, many have argued that the naira needs to be allowed to depreciate to reflect the market value, given that while it officially sells for N197, the parallel market rate is around N300, but the president believes devaluing the naira would amount to killing it, his spokesman, Garba Shehu said in a press statement released yesterday.

The President added that he had no intention of bringing further hardship on the country’s poor who, he said, have suffered enough already.

Likening devaluing the Naira to having it “killed”, President Buhari said that proponents of devaluation will have to work much harder to convince him that ordinary Nigerians will gain anything from it.

The President also rejected suggestions that the Central Bank of Nigeria should resume the sale of foreign exchange to Bureaux de Change (BDCs), saying that the Bureau de Change business had become a scam and a drain on the economy.

“We had just 74 of the bureaux in 2005, now they have grown to about 2,800,” President Buhari noted.

He alleged that some bank and government officials used surrogates to run the BDCs and prosper at public expense by obtaining foreign exchange from government at official rates and selling it at much higher rates.

“We will use our foreign exchange for industry, spare parts and the development of needed infrastructure.

“We don’t have the Dollars to give to the BDCs. Let them go and get it from wherever they can, other than the Central Bank,” President Buhari told the gathering.

The President reaffirmed his conviction that about a third of petroleum subsidy payments under the previous administration were bogus.

“They just stamped papers and collected our foreign exchange,” he said.

The President appealed to Nigerians studying abroad to bear with his administration as it strives to address the challenges they are facing as a result of new foreign exchange measures.

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