In March 2015, the News Agency of Nigeria(NAN) published a report, which was also syndicated in several Newspapers, that the All Progressives Congress Presidential candidate, Gen. Muhammed Buhari had promised “to ensure that the Naira was equal to the dollar in value, if voted into office”.
Buhari made this statement during the South East Presidential campaign rally of his party at the Dan Anyiam stadium in Owerri on Monday, 23rd March 2015. The APC candidate apparently lamented that “it is sad that the value of the Naira has dropped to more than N230 to $1” and he therefore cautioned that “this does not speak well for the Nation’s economy”.
Furthermore, Buhari also assured his vibrant, traditionally mercantilist audience, that ‘corruption would be tackled headlong” if he became President and therefore urged the large crowd of supporters from Abia, Ebonyi, Anambra, Enugu and Imo states, who attended the rally to vote for APC.
Our peoples’ ardent desire for change and the expectation that Buhari would tame the monster of corruption and also strengthen the Naira, as he had promised, ultimately swept the retired General back into office as President. Buhari’s resolve to tackle corruption headlong, is probably evident in the apparent renewed vigor of the Economic and Financial Crimes Commission(EFCC) and the plethora of both old and new case files which are reportedly being processed.
Expectedly, the outrageous media revelations of grand theft have induced public perception that the new Sheriff will arrest the pervading impunity in governance and the brazen misapplication of public funds. It is probably too early, after barely eight months, to expect convictions and other appropriate penalties that would convince Nigerians that Buhari is actually the real deal and that he would deliver on his campaign promise with regards to corruption.
Naira-Dollar
Instructively, however, Buhari may have also realised that unless the usual often protracted judicial process for the prosecution of financial crimes is promptly, radically reformed, some of the heavy weight corruption cases the EFCC is currently handling may sadly take forever to conclude.
Indeed, even if popular expectation still remains upbeat that corruption will become minimal and that indicted treasury looters will receive appropriate punishment, there is, certainly still no glimpse of hope that Buhari’s promise of making Naira equal in value to the dollar will materialise.
In this event, the Naira will remain increasingly rejected as a safe store of value, while an obviously bloated dollar demand will persistently burst the ranks of the official Naira exchange rate; for example, the wide margin of over N70/dollar which now exists between official and parallel Naira exchange rates, in the money market, would invariably also promote rent seeking and distort resource allocation with adverse consequences on inclusive growth and job creation.
Expectedly, the knee jerk reactions of CBN’s monetary strategies have turned out to be counter-productive to the dwindling Naira exchange rate. It is ironical that the same Buhari who condemned an exchange rate of N230=$1 in Owerri in March this year, has curiously, remained mute on the dismal fate of the Naira which currently trades officially at N197=$1 when the parallel market, in December 2015, simultaneously parades rates which exceed N265=$1, with still no respite in sight, in an economy that is presently, clearly unraveling and awash with surplus Naira.
In the above event, some critics may conclude that Buhari’s Naira lamentation during the campaign trail was probably just crocodile tears to win critical electoral votes that would bring victory to his party and also return him to power. Some observers may however, suggest that Mohamed Buhari probably did not fully understand the economic dynamics that predicate the Naira’s exchange rate mechanism, when he made the campaign promise to reinvent a rate of N1=$1! Nonetheless, party stalw
