Coming on the heels of the recent hike in price of petrol by the Federal Government, occasioned by the removal of subsidy, the President, Muhammadu Buhari has agreed to demands by the International Monetary Fund (IMF) to devalue the Nigerian currency to N290 against the dollar.
President Buhari has in the past maintained his position against any move to devalue the nation’s currency, a decision which he believed will not be in the interest of the average Nigerian.
This comes days after removal of fuel subsidy by the Buhari-led government administration, increasing the price of petrol to N145 a litre from the previous N86.5.
The Minister of Information and Culture, Lai Mohammed had earlier said that the increase in the price of pump petrol would create 200,000 jobs and secure 400,000 more.
Lai Mohammed made the disclosure at the inauguration of the Advertisers Association of Nigeria (ADVAN) Marketers’ conference in Lagos on Friday, in a statement read by his media aide Segun Adeyemi.
The Minister said,
“It (new petrol price regime) would end the recurrent fuel scarcity by ensuring product availability across the country, reduce hoarding, smuggling and diversion of products substantially, improves fuel supply situation through private sector participation, creates labour market stability, as this will potentially create additional 200,000 jobs through new investments in refineries and retails and prevents potential loss of 400,000 jobs in existing investments.”
“With the drastic fall in the price of crude oil, which is the nation’s main foreign exchange earner, there has also been a drastic reduction in the amount of foreign exchange available. The unavailability of forex and the inability to open letters of credit have forced marketers to stop product importation and imposed over 90 percent supply on the NNPC since October 2015, in contrast to the past where NNPC supplies 48 percent of the national requirement”
Reports say President Buhari made the decision to devalue the Naira with the hope of possible credit facilities from the IMF in the near future. The CBN governor, Godwin Emefiele, and the President’s economic team however was reported to be unaware of the move by the President.
At the moment the Naira exchanges for N199 to a dollar at the official CBN rate, while the at the parallel market it exchanges for about N350 – 360 to a dollar.