Bloomberg has said that for Nigeria to avoid more economic troubles, President Muhammadu Buhari must be flexible in his response to the current recession in the country especially on foreign exchange control.
It also said that the eventual dismantling of forex controls would not only attract foreign investment but make the economy more productive.
Bloomberg in its editorial published yesterday, fumed at what it described as President Buhari’s rigid leadership disposition, noting that the falling state of Nigeria’s economy was a source of concern to the world.
It however urged the government to introduce targeted cash payment for the poor as a measure against the likely effect of the removal of forex may have on the poor.
The editorial reads: “Africa and the world cannot afford a failing economy in the continent’s most populous nation. Yet that is exactly what Nigeria might be getting: Its economy is on track to shrink by 1.7 percent this year, the official unemployment rate has more than doubled over the last two years, and inflation is at an 11-year high.
“One concrete step President Muhammadu Buhari could take to address the crisis would be to eliminate the country’s disastrous foreign exchange controls. Instead, Buhari has made no secret of his desire to defend Nigeria’s currency. And the central bank has mostly gone along.
“Despite allowing the devaluation of the naira in June, it is continuing to manipulate the exchange rate, discouraging foreign investors, creating a crippling shortage of dollars for businesses that need to import, and feeding a currency black market. To keep down the street price of vanishing dollars, Buhari’s government has arrested informal money-changers. More capital controls are in the works.
“Buhari faced ugly circumstances when he took office in May 2015. The plunge in oil prices had left the economy reeling and government coffers bare, and attacks by Boko Haram were ravaging the country.
“Yet while some progress has been made fighting both terrorism and corruption, Buhari’s rigid leadership style has made the country’s economic problems harder to solve. The board concluded that Buhari’s election and pledges of good governance rightfully raised expectations across Africa. To fulfill those hopes, however, he will have to demonstrate more flexibility.”
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