As a result of the continuous refusal of President Muhammadu Buhari’s to devalue the naira not minding the wide gap existing between the so-called ‘official rate’ for foreign exchange and parallel market rate of the country’s currency to the US dollar, in addition to the absence of foreign reserves to defend the naira, Ayodele Fayose, the Ekiti State Governor, has said that the dogmatic foreign exchange policy of the administration is killing Nigerians adding that Buhari’s unwillingness to accept the naira devaluation is an attempt to shortchange Nigerians. Hear him:
“With the gap between the official rate of N199 and open market rate of over N400 to one dollar, Naira has already been devalued.
“Therefore, President Muhammadu Buhari must stop deceiving himself and short-changing Nigerians, especially States and Local Councils in the country with his Forex Policy.”
Governor Ayodele Fayose, who recalled that there was never a time in Nigeria’s history when the gap between the official rate of the dollar and open market rate exceeded N200, also noted that it is economically senseless for the Federal Government to be calculating the national revenue based on N199 official rate of the Central Bank of Nigeria (CBN) to one dollar when in fact States and Local Councils that are sharing the revenue with the Federal Government operate their businesses at the open market rate of over N400 to one dollar, thereby resulting in the closing down of businesses and unimaginable daily increase in the prices of goods.
Mr. Lere Olayinka, the Special Assistant on Public Communications and New Media to the governor, in a statement issued in Ado-Ekiti on yesterday, Sunday 21st February, quoted the governor as saying that aside from reproducing corruption through round tripping or foreign exchange arbitrage, Nigerians are also being cheated and middle class Nigerians, the main people that contribute to the growth of the country’s economy are being slaughtered.
According to the Ekiti State governor, Ayodele Fayose, Buhari is applying his failed economic policy of 1984 during which the prices of goods were fixed, not considering the cost of supply, consequently, vital commodities like milk and sugar became scarce and Nigerians had no choice but to line up in the hot sun to buy rationed commodities.
He once again pressed President Buhari to apportion more time to the dwindling economy of Nigeria rather than travelling all around the world, wasting $1 million per foreign trip, as he said:
“President Buhari has travelled to 24 countries in eight months, and will be spending 16 out of the 29 days in February outside the country, with over $500,000 being spent on estacode while the Presidential Air Fleet, which includes fueling of the planes and allowances for crew members is said to be in the range of $500,000.
“The President’s entourage obviously collect their travel allowances in dollars on official rate of N199 and come back to Nigeria to change it at the open market rate of N400. That must be the reason they encourage the President to be junketing abroad when life is becoming unbearable for Nigerians.”
“The situation is such that Nigeria gets say $2 billion revenue in a month, calculates the $2 billion revenue on the basis of the official CBN rate of N199 and share the revenue among the three tiers of government.
The Governor Ayodele Fayose further said;
“In elementary economics, the implication is that when revenue is calculated based on N199 to one dollar and the federal government will be declaring say revenue of N400 billion to be shared by the three tiers of government, the value of revenue that should have been shared will be over N800 billion at the open market rate of N400 to one dollar.
“Meanwhile, the three tiers of government pay salaries to workers on the basis of N199 per dollar while the workers pay for goods and services which prices are determined by the open market rate of N400 to one dollar.
“Also, Nigeria is now faced with a situation whereby funds are obtained from the official forex market (at lower rates) and diverted to other markets and sold at a higher rate by forex dealing banks and users, who make billions of naira profit just for doing almost nothing.
“Therefore, the reality that we must all accept is that we must allow the forces of demand and supply to determine the value of our currency, not administrative fiat. Most importantly, the government does not have the reserves to keep the naira-dollar rate at its official level.
“The Naira must therefore be devalued. Anything other than this will mean that we are deceiving ourselves with forced foreign exchange rates and it is my position that this regime of deceit must stop.”
Mr. Ayodele Fayose’s aappraisal came just as the presidency confirmed that Buhari would start a 7day official visit to Saudi Arabia and Qatar beginning from 22nd February, 2015.
A statement by his spokesman, Mr. Femi Adesina, said Buhari would be accompanied on the trip by a high-powered federal government delegation, including the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation, (NNPC), Dr. Ibe Kachikwu.