Former Deputy Governor of the Central Bank of Nigeria, Kingsley Moghalu, has criticized the notion that the naira could stabilize at N400 to the dollar, calling it unrealistic. Moghalu expressed this viewpoint in a series of posts on his social media account on Sunday.
In his posts, he argued against the idea of pegging the naira at N400 to the dollar, stating that it is based on a false premise. Moghalu emphasized the importance of allowing the exchange rate to reflect its true market value, rather than artificially propping it up, as he believed was done during the tenure of former CBN Governor Emefiele. According to Moghalu, maintaining an artificial exchange rate led to rampant speculation and economic instability.
He further pointed out that Nigeria lacks a robust export economy beyond oil and does not possess substantial foreign reserves, making it unlikely for the naira to return to an artificially low exchange rate. Moghalu stressed the need for Nigeria to focus on developing a value-added manufacturing sector that can generate significant foreign exchange revenue.
Moghalu highlighted the critical role of addressing the electricity shortage in Nigeria, citing the country’s low power generation capacity despite its large population. He argued that increasing electricity generation would unlock the potential of Nigerian entrepreneurs and facilitate economic growth.
In conclusion, Moghalu advocated for a shift towards creating a sustainable and diversified economy, underpinned by a strong manufacturing sector and improved infrastructure such as electricity generation.
