Good thing the Francophone countries of the CFA currency zone have ended the colonial arrangement in which 50% of their reserves had to be deposited with the French Treasury (nearly 60 years after independence!) and renamed their currency the Eco.
The problem is that this makes the @ecowas_cedeao plan for a regional currency named the Eco by 2020 dead in the water. That plan was always problematic as several countries in the region have still not met the criteria to form a common currency, and Nigeria’s economy which would
have had to carry a heavy burden of backing up that currency with its reserves, is simply not strong enough. Some will criticize the Francophones in West Africa for the decision to still peg their currency to the Euro but I will not. It ensures currency stability even if monetary
policy will not be fully independent. I once proposed as deputy governor @cenbank that Nigeria should look at the option of pegging the naira to the dollar as a matter of strategic national interest. Else, we must reposition away to float the naira and use trade and other policy
to promote a competitive export led economy that brings in forex from exports and foreign investment rather than our current stance of artificial valuation of the naira which feeds an importation culture, and then “banning” forex for food imports. This is a contradictory, short-
sighted approach that lacks long term strategy and create an artificial naira stability in the short term because WHEN (not IF) the oil price sneezes again, the naira will catch pneumonia and will have to be devalued. Our economic policy simply lacks strategy and the political
will to transform Nigeria’s economy and bring about real development. Instead, we are servicing vested special interests, and increasing debts to foreign creditors. With a strange “plan” to borrow another $29 billion with very little domestic revenues, our revenue to debt-service
ratios will head north of 70% ! This will be nothing short of slavery! Nothing will be left for real development spending when we combine this reality with our humongous recurrent expenditures. Our weak policy thinking is really good at creating and redistributing poverty.Massive
foreign borrowing has NEVER been beneficial to Nigeria. A $29 billion loan package will not be different. And please don’t tell me about $500 million to “digitalize”@NTANewsNow , anymore than you will tell me about N37 billion to “renovate” @nassnigeria. Cry, the beloved country!
