The experts praised it, from Lagos to London to New York. But yours truly did not buy it. Yes, I was possibly the only person who challenged the core thesis of floating the Naira. As the banks, traders, etc trumpeted the consequential policy, I cautioned that Naira could struggle to attain a stable state.
Nothing big, I only used what I learnt from AO Lawal’s textbook in secondary school (I did not do Economics in SSCE, rather, I bought the book, read and took external GCE while in secondary school, since those days, it was either Further Maths or Econs; I chose Further Maths for SSCE). I wrote on June 30 2023 thus.
‘In his O’ Level textbook on economics, AO Lawal explained demand and supply and the movement of price on the demand-supply curve. If I apply what he explained in that book, floating naira with no capacity to earn USD dollars will kill Naira, because there is an asymmetric imbalance on demand and supply of USD in the Willing Buyer, Willing Seller nexus. In other words, two people may each have $100 to sell while twenty people want to buy each $100. If you do not close that number to near parity, the equilibrium point will keep shifting and I do not see how Naira will stabilize because demand outweighs supply here.’
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‘I have read many theses on how Naira will stabilize to N680. Good luck. But if you visit Marina Street in Lagos, and climb one of those tall buildings (I have friends who give me access whenever in Lagos), look at the far habour, count the number of ships coming into and leaving Nigeria – and then examine their capacities. Most come loaded, most depart empty! What does it say? We spend more US Dollars than we can “create”.’
Can someone hear me now? I think we make sense on this feed and should be a required Follow for Nigerian leaders. Hahahaha. Lol
Thank you for this. I also remember sharing your sentiments and trying to warn people.
The funniest part is that there is still a fx black market despite their claims that floating the Naira will stop multiple
exchange rates. The so-called experts are now complaining gsk etc— Vincent (@realgbolashow) December 7, 2023
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