Moghalu to FG: Stabilise naira at actual market value

Moghalu to FG: Stabilise naira at actual market value | Raise $30bn from NNPC IPO

April 30

18:25 2024

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Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria (CBN), has advised the federal government to stabilise the naira at its true market value.

Moghalu spoke in a statement on Tuesday.

On April 15, naira traded at N1,100/$ in the parallel market, however, as of April 29, the local currency has depreciated to N1,350 per dollar.

At the official window, the naira depreciated from N1,136.04/$ to N1,419.11 against the dollar within the same period.

Commenting on the development, Moghalu said the naira “tanking back down to the 1,400s to $1 demonstrates what some of us have been saying”.

“Seeking a falsely ‘strong’ currency when the fundamentals are out of whack is shadow chasing. The focus should be on the stability of the exchange rate, not a populist exchange rate and premature declarations of ‘best performing currency’,” he said.

“Reports that there are now multiple exchange rates to BDCs, Customs, and NAFEX are also worrying.

“It’s not yet uhuru. Let us stabilise the naira at whatever is its true market value and then pivot to the real issues.”

FOCUS ON INCREASING ELECTRICITY OUTPUT, PRIVATISING NNPC

Moghalu said the focus of the government should be improving the power supply.

He said to create a truly productive economy, Nigeria’s electricity generation should be raised to “20-25K megawatts of 24 hour electricity in 2-3 years starting with Lagos, Kano, Onitsha and Nnewi (Aba seems promising with Geometric power)”.

Moghalu also said the country needs to deal decisively with oil theft and ramp up oil production to bring in dollars.

He advised that the Nigerian National Petroleum Company (NNPC) Limited be privatised and suggested “$20-$30 billion” be raised from an initial public offering (IPO).

“Or go for a “whale” of a $20-30 billion stabilization bailout from the International Monetary Fund (nothing less), with forensic oversight of the money and how it is spent,” he said.

“All these ‘trickle down’ borrowing of $1 billion here, $2 billion there won’t hack it. We need to get serious. Managing an economy is not politics or a clap-and dance performance theatre. It’s serious business.”

Moghalu also said confidence in Nigeria’s economic reforms, in terms of serious portfolio inflows, remains tentative, adding that reversals would not help.