SIR: The launch of e-Naira by President Muhammadu Buhari has put Nigeria in the league countries with electronic currencies. This is a welcome development. As stated by Mr President during the launch, the e-Naira will boost the country’s GDP by $29 billion in the next 10 years and attract more investment.
The launch of the e-Naira, unfortunately, coincides with the worsening economic situation particularly with the free fall of naira, and the currency chasing few available goods and services in market. The e-Naira has also come at a time when the per-capita income of the country remains the same since 1981, according to the World Bank’s country’s director.
While e-Naira will curb illicit financial transaction and boost transactions in the financial sector, the apex bank did not explain to Nigerians whether the new digital currency will strengthen our fast crashing physical naira with exchange rate hovering around 570/$1 or not. Although, one is not an economist, but the continuing depreciation of naira amidst hyper-inflation in the country should worry every Nigerian.
In other words, the primary question begging for answer is – is the e-Naira going to aid our weak and devalued national currency, make it strong and stable?
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Understandably, there are many contributory factors to the current fate of the naira: political instability, terrorism in north east, banditry and other crises coupled with erratic power supply. Topmost on the list is the dwindling revenue from oil. Nigeria depends solely on revenue generated from oil to finance our imports. Our economy is thus affected anytime there is fall in oil price as it directly impacts on the exchange rate. Nigerian’s obsession with foreign goods hardly helps as Nigeria imports virtually everything the result of which is the pressure on the foreign reserves hence the continuing depreciation of the naira.
Foreign investors look for stable countries to invest their capital. Again, it is hard to see foreign investment in an unstable clime and where government policies are sometimes unpredictable.
Although, the Central Bank of Nigeria has through monetary policies tried to normalize things, there is need for paradigm shift from the current dominance on oil. It is time to fix our non-oil sector.
If the country can diversify and develop our agricultural sector again, incentivise the fledgling information technology sector and the petro-chemical and allied industries, the country would have begun the needed march to true diversification. Those are what will ultimately impact positively on the exchange rate and consequently bring improvement to the lives of average Nigerians.
- Ibrahim Mustapha,
Pambegua, Kaduna State.