A statement by his Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, on Thursday quoted the President as speaking at a meeting he had with Nigerians living in Kenya late on Wednesday.
Buhari, who is currently on a three-day state visit to Kenya, was said to have maintained that while export-driven economies could benefit from the devaluation of their currencies, such a move would only result in further inflation and hardship for the poor and middle class in Nigeria’s import-dependent economy.
The President said he had no intention of bringing further hardship on the country’s poor, who he noted had suffered enough already.
He likened further devaluation of the naira to having the currency “killed.”
Buhari added that proponents of devaluation must work harder to convince him that ordinary Nigerians would gain anything from it.
The President also rejected suggestions that the Central Bank of Nigeria should resume the sale of foreign exchange to Bureaux De Change, saying that the BDC 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,” he noted.
Buhari alleged that some bank and government officials used surrogates to run the BDCs and prosper at public expense by obtaining foreign exchange from the 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. We don’t have the dollar to give to the BDCs. Let them go and get it from wherever they can, other than the central bank,” Buhari told the gathering.
The President reaffirmed his conviction that about a third of petroleum subsidy payments under the previous administration was bogus.
“They just stamped papers and collected our foreign exchange,” he stated.
Buhari appealed to Nigerians studying abroad to bear with his administration as it strives to address the challenges they were facing as a result of the new foreign exchange measures.
He said that he was optimistic that the Nigerian economy would stabilise soon with the efficient implementation of the measures and policies that had been introduced by his administration.
However, some economic and financial analysts have faulted Buhari’s position on the naira, stressing that the CBN would find it difficult to preserve the currency from further devaluation amid the depleting external reserves.
The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Ckukwu, said, “This position is not sustainable; the CBN will find it difficult to keep and preserve the naira in the face of falling forex income to the nation.
“We cannot continue like this as a country. Already, the CBN is no longer able to provide forex for basic raw materials and production inputs; this may lead to further factory closures. It is in our best interest to devalue now.”
Renowned economist and Chief Executive Officer, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said a combination of naira devaluation and forex controls by the CBN would save the country.
He said the naira-dollar official exchange rate, pegged at between 197 and 199, was not realistic, adding that there was a need for further adjustment of the official exchange rate.
A professor of Economics at the Olabisi Onabanjo University, Sheriffdeen Tella, is, however, of the opinion that a further devaluation of the naira will not be in the interest of an import-dependent nation like Nigeria.
He said countries like China allowed official devaluation of their currencies because they had several products to be exported in order to earn forex.
Tella said while such a move could be good for export-oriented countries like China, it would be counterproductive for an import-dependent nation like Nigeria.
“Do we have the products to export abroad if we are to devalue the naira? Devaluation will, no doubt, make exports to be more competitive in the international market, but we don’t have the products to be exported for now. This is why devaluation may not be good for Nigeria at this moment. China will allow its currency to be devalued because it has the products to be exported,” he explained.
Chukwu, however, disagreed with Tella on this position, maintaining that devaluation of the currency was good for an import-dependent economy like Nigeria.
He said, “Actually, naira devaluation is good for the economy; it will not hurt an import-dependent economy like ours the way some people have perceived it. When we devalue the naira, it will make some imported goods to be so expensive that some local substitutes will begin to spring up; this will help to stimulate domestic production.
“Again, when we devalue, it makes our exports as a country to be cheaper such that they will become more competitive in the international market.”
Last year, the former Governor of CBN, Mallam Lamido Sanusi, said Nigeria needed to devalue the naira because the CBN might not be able to sustain its current forex control polices on the long run, especially in the face of the depleting forex earnings by the nation.
Another former CBN Governor, Prof. Chukwuma Soludo, in a paper presented at a forum last year, said history had shown that forex restriction had not worked in many countries in the past.
While the naira sells for 306 against the dollar at the parallel market currently, the CBN still keeps the official rate at between 197 and 199.
Economists said the widening gap between the official and parallel market rates would continue to breed all manner of sharp practices in the forex market.
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