WHY FLOATING THE NAIRA IS NOT A GOOD IDEA.
The idea of floating naira/USD and concurrently removing fuel subsidy is one of the main reasons for our current economic woes.
As both may sound as great economic reform strategy, they are not the best for our own present situation. Or let me say they were not properly implemented.
Look at how Naira/USD has been fluctuating for a couple of days now…some speculators are smiling to the bank every week. Small businesses are dying on a daily basis.
It is only USD. EURO and POUND STERLING that are not supported even the second largest economy (China) currency is supported. Why won’t we support our currency when we know we don’t have the capacity to curb corruption. Why do we have to pass this weakness from govt to the masses.
The three major currency floating is because of their universal acceptance. Spent anywhere!
However, I experienced something interesting this morning. What actually motivates me to drop this note. I wanted to establish a fact, so I decided to tender pound sterling as legal tender in France, but to my surprise, they rejected it but accepted USD. Probably it won’t be that way in other Europen countries. I doubt if they even know any currency called Naira by the way, come to think of accepting it. How would you float that!
The point is that we can’t equate our Naira to USD because some people argue that most currencies are not supported, and as such, Naira should be floating too. Again, we can’t sustain not supporting it except if we are massively export driven. But rather we are encouraging importation of toothpick and others.
Kola ASATOLA ASANIKE is a public affairs analyst and politician.
