Devaluation of Naira will continue until imports reduce – Sanusi

Former governor of the Central Bank of Nigeria (CBN), Muhammed Sanusi, has stated that the devaluation of the naira will continue unless Nigeria’s appetite for imported items reduces.

Speaking during an interview with Arise that aired on Friday, Sanusi said Nigeria is yet to tap into its economic strengths using the comparative advantage system as the country imports both things that can be locally produced and goods that cannot be locally made.

The former emir of Kano faulted the government’s dependence on oil, saying such action by successive administrations has impacted the economy negatively.

“On exchange rates, we are looking at a monoculture economy. Over 90 percent of what government earns comes from the oil sector and oil is a commodity, the price goes up and down. We set up the country to suffer,” the former of Emir of Kano said.

“First of all, you will fix a price for petroleum product even though you are not refining your petroleum products. How can you fix a price for a product you do not produce. We produce crude oil but the price we fixed was for refined petroleum product.

“So if the crude oil price goes up, we get the benefit of high crude oil price but we lose it immediately because we have to pay more as subsidy for importing refined petroleum product. So we are the only oil-producing country that does not see the benefit of rising oil prices.”

In 2014, the CBN officially announced the devaluation of the naira, thereby allowing the national currency to depreciate, amid falling crude oil prices and pressure on foreign exchange.

BusinessLive recalls that the CBN has had to devalue the naira twice in 2020; first from N306/$ to N360/$ and from N360/$ to N380/$.