Naira Depreciation: blame governors’ forum

SIR: The naira has been on a steady decline for the past few months. The disparity between rates at the Central Bank of Nigeria (CBN) and that of the parallel market is as clear as the difference between day and night.

Many economic analysts and keen followers of the economy have blamed the situation on factors varying from the fall in oil prices to the depletion of the Excess Crude Account and the role of the Bureaux de Change (BDCs).

It would be recalled that former Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala had a run-in with the 36 governors under the auspices of the Nigeria Governors Forum. Against her advice, significant portions of the Excess Crude Account (ECA) were used to augment monthly allocations to local and state authorities. The states had maintained that rainy days were already at hand and in fact (the rain) was already pouring, so the money needed to be used right away.

This rash nature of the governors, who always want to spend, spend, and spend, is why we are presently facing this freefall in the value of the Naira. If they had heeded the counsel of the former finance boss to save for the rainy day, we would not be in the mess we are in now.

*Daniel Osofisan,
University of Jos.