Naira Depression and What Sanusi Can Do (III)c

By Sampson Iroabuchi Onwuka

....Needs be said that US Dollars in Nigeria has no value but its exchange rate has a lot to do with its dominance in Nigerian local market. Pounds, Euro have no value in Nigeria at all saving for what the locals could gain when they exchange for Naira at local Bureau of Exchange. The issue of parallel market and parallel economy so often a lightning rod in Nigerian market has not been dealt with by Sanusi and his Cabal. The impact of sure market strategy and the bloodletting of the Nigerian black markets also encourage heavy money laundry, all of which do not help Nigeria Naira war against the USD, the Pounds Sterling, the Euro, etc, by day and by night, a war it must at least engage to its end…until perhaps Equilibrium which is not certain is attempted, achieved.

Currency is a unit of exchange that defines the economic performance of any country in the world. Price is a function of the market, which is how much you can pay for a product in a given market environment. They constitute a credit economy. Managing a credit economy is a big issue and in terms of the credit, we shift our intellectual pole of ‘credit’ to include paper money and securities which is not paper currency at all but fortune. The more we capitulate on the Naira, either by exchange batten or barter, we erroneously destroy the credibility of Nigerian Naira. In essence, Naira capitulation is bad credit rating of the local currency by locals.

Constant depreciation of the Naira may result in high employment. High employment is cancer for poverty and high inflationary pressure discourages any kind of growth. Many countries break this cycle through money injection and through freezing of credit to avoid new debt problems and re-issue of bank. But inflation is also an issue when you are constantly sinking, when there is monopoly in business, when there is raking in the mono-cultural economy.But the inflation which deepens the further depreciation of the Nigerian currency can be helped by capping the source of raking in Nigerian economy, which sometimes brings with it a counter argument, an argument that may not apply to our third world economy.