Kingsley Moghalu, a former deputy governor at the Central Bank of Nigeria, strongly argues that the idea of a Naira-to-Dollar rate of N400 is unrealistic. He maintains that the exchange rate should genuinely reflect its market value.

Moghalu suggests that during Godwin Emefiele's leadership at the Central Bank, there was a deliberate creation of an artificial environment, apparently aimed at appeasing politically influential individuals who lacked economic understanding at that period.

Moghalu, expressing his views via his online platform on Sunday, emphasized that the artificial conditions allowed significant arbitrage opportunities for speculators, resulting in detrimental effects on the economy.

He advocated for a shift towards prioritizing the development of a value-added manufacturing export economy that generates foreign exchange earnings beyond oil, stressing the urgency of this transition.

Moghalu reiterated his stance that aiming for a Naira-to-Dollar rate of N400 is unrealistic. He highlighted the importance of the exchange rate reflecting its true market value, rather than being artificially manipulated to appease politically influential individuals, as observed during the Emefiele era at the central bank.

"The artificial conditions provided ample opportunities for speculators to exploit, leading to significant economic losses. Nigeria currently lacks a robust export economy, which is central to addressing this issue.

Furthermore, our foreign reserves do not amount to $100 billion. Therefore, the notion of the Naira's foreign exchange rate swiftly reverting to an idealized state lacks a solid foundation. Rebuilding or attaining full investor confidence, as we experienced when the rate was between N150-165 to the dollar, will also require time."

"It is imperative that we prioritize the meticulous development of a value-added manufacturing export economy that generates significant foreign exchange earnings beyond oil. A critical aspect of achieving this goal is addressing the longstanding electricity challenge, with our current generation capacity stagnant at less than 4,000 megawatts for a population of 200 million over many years.

Increasing our power generation to even 20,000 megawatts (not to mention the levels seen in countries like South Africa with 50,000 megawatts for a population of 60 million, or Brazil with 181,000 megawatts for a population only slightly larger than Nigeria) would unleash the full potential of the Nigerian entrepreneurial spirit.

https://biographyinsight.com.ng/moghalu-naira-at-n400-to-dollar-is-unrealistic/