Economic Crisis: Why Tinubu’s policies will not work — Ned Nwoko

Senator Ned Nwoko, representing Delta North, has expressed his belief that the economic reforms planned for Nigeria may encounter significant obstacles due to the coexistence of multiple currencies, which dilutes the value of the naira.

During a discussion on Channels Television’s “Politics Today,” Ned Nwoko highlighted the challenges facing the Nigerian economy, noting that the pervasive use of foreign currencies undermines the strength of Naira.

He remarked on Nigeria’s distinctive situation, where foreign currencies such as the dollar, pound, and euro are permitted to circulate alongside the national currency, resulting in a diminished global demand for the naira.

He contrasted Nigeria’s approach with that of other nations, citing the UK and the US, where foreign currencies must be exchanged at authorized locations and salaries are exclusively disbursed in the local currency.

Ned Nwoko suggested that for Nigeria’s economic stability to improve, transactions involving foreign entities should necessitate the use of the naira, thereby compelling foreign buyers to acquire the local currency.

In his words:

“Our economy as it is, is in tatters. It is in some kind of quagmire. It doesn’t matter how you look at it or policies you’re trying to introduce here and there, nothing will work.

“Nothing will work as long as we keep tying the exchange rate to our consumption. When we became an independent nation we had naira and our currency was quite strong.

“Then suddenly, we began to have other currencies, dollar, particularly, and pounds and now Euro. There’s no country that I know in the world that has the use of multiple currencies.

“If you go to Britain with the dollar, you must change it at the BDC. You cannot pay for anything with the dollars in the UK. Everybody is paid their salaries in pounds in the UK. The same thing when you go to America. Everybody uses dollars.

“So, for things to work, assuming that we agree to phase out the use of foreign currency in Nigeria, what it means is that if you want to buy oil, gas or gold in Nigeria, it would require you to use only the naira.

“So, if they’re coming from the UK for example, they’d look for Naira so that they can transact because they know they can’t use any other currency.

“Currently, nobody looks for Naira because we’ve made it so easy for them to transact with other currencies. They can come here with any currency and that means effectively, there is no global demand for our Naira. Our money has no value beyond Naira.

“For things to work, we must prevent the use of foreign currencies and then people will start to look for the Naira. When they begin to look for Naira, our currency will appreciate”.