Nigeria faces economic disaster over plans by minister to float the naira

 ...Months after floating, Egypt's inflation hits record high

Per Second News---The minister of Finance, Mrs Kemi Adeosun and some cabinet members in the Buhari administration risks sparking social unrest and economic breakdown in their call to float the Naira.

The moves seen by many as appeasing international financial agencies at risk of enraging millions of poor people in Nigeria.

 “Nevertheless, one cannot discount the multiple blunders caused by conflicting government policies during the fiscal year 2015-2016, all of which have negatively impacted the Nigerian economy, said Segun Mebude, a Lagos based economist. “Many of these blunders are due to financial policies adopted to resolve economic issues. Unfortunately, most of these measures were counterproductive and on top of them is the renewed call to float the Naira.

In interviews done by Per Second News during the just concluded World Bank/ IMF annual Spring meetings in Washington, dozens of economists agreed that with every currency devaluation, every  citizen loses a significant portion of his/her life savings, pays higher prices for the same products and is likely to refrain from any extra spending that could improve the cycle of the economy, thus causing a recession in the market.

One factor militating against floating of the naira is the lack of infrastructures in the country. Nigeria’s infrastructure is in a deplorable state and the nation’s infrastructural needs are evident for all to see. Much of the road system is in disrepair and barely useable.

Once again the government might find itself in a quagmire of its own making by floating the currency, Per Second News learnt.

Accordingly, should the minister of finance, Kemi Adeosun, continue on this path of treating the Nigerian economy according to simple textbook formulas, without considering the consequences of her decisions on the populace, the situation will only exacerbate even further.

Egypt’s currency submerged after floating

Egypt‘s inflation surged to records high of over 30.1 percent in April, propelled by a steep currency depreciation since the central bank dramatically floated the Egyptian pounds last year, Per Second News gathered.

The measures have pushed up prices sharply in the import-dependent country of more than 90 million.

In cities and towns, food and beverage inflation reached 29.5 percent, healthcare inflation 27.4 percent and transport 22 percent, undermining already-paltry spending power in an economy where many subsist on the equivalent of a few dollars a day.

Shortages of sugar, food items and medicines in recent months have caused public uproar and piled pressure on the Sisi led government.

Economist Madgy Toulba is more direct than some in expressing his concerns over Egypt’s floatation.

“It’s a disaster, he said.

He said floating has exposed the Egyptian currency to supply and demand, but since there is no demand for the Egyptian pound at present, it will plunge in value as a result.

"The government is implementing the IMF conditions very well," he said

“Sometimes floating the currency can be good, if the country already has a rich store of foreign currency. But the country’s only source of foreign reserves at the moment is foreign loans, grants and deposits, which are not a solid basis for this decision,” he said.

Some members of the Nigerian cabinet are making President Buhari’s sincere efforts and vows to revive the Nigerian economy in two years even harder by calls to float.

For decades, average Nigerians have been continuously hearing about alleged “economic reform”, usually followed by paper formulas that only add to their daily burdens. They still remain hopeful and wish to believe that their government is aware of their problems and is vehemently working on resolving them. That belief is diminishing lately and this needs to be addressed urgently.

Last modified on Tuesday, 25 April 2017 15:00