One dollar could go for N500, President Bola Tinubu’s economic adviser, Tope Fasua, has warned currency speculators who profit from the usually poor performance of the naira against the American dollar.
Fasua issued the warning at the launching of a Central Bank of Nigeria (CBN) book titled ‘Cowries to Cashless’ on Tuesday.
The naira has been experiencing a consistent increase in value over the recent days. According to Fasua, this upward trend is anticipated to persist, driven by the government’s ongoing policy implementation.
“When you want to destroy a country, destroy its currency first,” Fasua, who represented Vice President Kashim Shettima said at the Abuja event.
“For those who are speculating and praying and wishing that the currency would become nonsense, I believe that policies being rolled out by the CBN and the government that I serve, led by the President, will shock some of them.
“You need to listen to the agenda from the man (President Tinubu) himself and you will see that the level at which he is thinking is far ahead of most of us.
“You know, he has some very great ideas coming up. Some of them are what you’ve seen reversing the fall in the value of the naira, but he has also challenged us to review forward many of the targets, for example, the idea that Nigeria’s economy will get to a trillion dollars. He wants to achieve it by 2026.
“Some people thought the naira would continue to lose value. Of course, we can already see what’s going on, and who knows, maybe the naira will strengthen even further to maybe something like N500 or N600 (against the dollar). I’m beginning to see some of those.”
He said there was going to be some tectonic reorganization of the banking sector to make the naira more stable and stronger.
“If you want to position your exports properly, you have to be strategic, even in terms of the value of your currency. So you’re going to see all of these, including efforts from the fiscal side. We have patriots running the economy right now. And naysayers have to be very, very afraid,” Fasua said.
Fasua, however, got some pushback at the event.
“President Tinubu’s wish to shock currency speculators is well intended but the road to failure is always paved with good intentions,” HIGHCAP Securities Limited’s vice executive chairman, David Adonri, warned, raising concerns about Nigeria’s soaring debt profile.
‘’The federal government has huge foreign currency-denominated debt that dangles like an albatross over the economy. CBN, over which the government has vicarious liability, has unsettled overdue foreign currency obligations by way of trade credits and forward contracts. These all require settlement with foreign currency.
“Instead of pursuing currency speculators possibly by throwing hard currency into the foreign exchange market to increase supply, greater attention should go to debt reduction, the extinguishing of outstanding CBN obligations, and engineering infrastructure development.
“The market mechanism of the newly deregulated foreign exchange market should be allowed to allocate FX according to market reality. Compared to its obligations, FGN/CBN do not have the kind of FX inflow to sustain the appreciation of the naira.
“Government should let markets sort themselves out. Sooner or later, without needless intervention by the government, the market will discipline speculators.
“Monetary policy tools for strengthening the naira have been exhausted because the weakness of the currency comes from excruciating insecurity and supply gap which only fiscal policy can address now.”