Buhari rejects devaluation of naira

President Muhammadu Buhari says there is no chance the naira will be devalued and that devaluation proponents will have to work hard to convince him otherwise.

Falling crude oil prices have strained the country’s foreign reserves, leading to the exclusion of 41 imports from accessing forex from the Central Bank of Nigeria (CBN).

Many have argued that the naira needs to be allowed to depreciate to reflect the market value, given that while it official sells for N197, the parallel market rate is around N300.

But Buhari has likened devaluation to “killing the naira”, his spokesman, Garba Shehu, said in a press statement released on Thursday.

According to Garba, Buhari said in Nairobi, Kenya, late Wednesday that he was yet to be convinced that Nigeria and its people would derive any tangible benefit from an official devaluation of the Naira.

He was speaking at an interactive meeting with Nigerians living in Kenya.

Buhari said while export-driven economies could benefit from devaluation of their currencies, “devaluation will only result in further inflation and hardship for the poor and middle classes in Nigeria’s import-dependent economy”, adding that he had no intention of bringing further hardship on the country’s poor who “have suffered enough already”.

Likening devaluing the Naira to having it “killed”, Buhari said that proponents of devaluation will have to work much harder to convince him that ordinary Nigerians will gain anything from it.

He rejected suggestions that the CBN should resume the sale of foreign exchange to bureaux de change (BDCs), saying that the the business had become a scam and a drain on the economy.

“We had just 74 of the bureaux in 2005, now they  have grown to about 2,800,” Buhari said.

He alleged that some bank and government officials used surrogates to run the BDCs and  prosper at public expense by obtaining foreign exchange from government at official rates and selling it at much higher rates.

“We will use our foreign exchange for industry, spare parts and the development of needed infrastructure,” he said.

“We don’t have the dollars to give to the BDCs. Let them go and get it from wherever they can, other than the central bank.”

He maintained that about a third of petroleum subsidy payments under the previous administration was bogus.

“They just stamped papers and collected our foreign exchange,” he said.