Respected former head of Nigeria’s Central Bank, Lamido Sanusi has said the government should end its policy of trying to maintain the value of the currency, the naira. Mr Sanusi said the drawbacks of the policy “far outweigh its dubious benefits”, the Financial Times reports.
President Muhammadu Buhari had told the BBC last week that he was not convinced of the need to “murder” the naira.
However the falling oil price has put pressure on his currency policy. While the authorities are keeping the official naira rate at around 200 to the US dollar, the black market rate is closer to 300 and sometimes more than.
Because the Nigerian government relies on oil exports for vital foreign exchange, the declining price means there are fewer dollars in the country.
“The government does not have the reserves to keep the exchange rate at its official level in the market, ” Mr Sanusi said again while speaking with the Financial Times. The policy has “never worked” wherever it has been tried, he added.