Nigeria Economy

Cbns Policies Impact Nairas Decline Asserts Utomi1

CBN’s Policies Impact Naira’s Decline, Asserts Utomi

Pat Utomi, a renowned political economist, has attributed the continuous depreciation of the Nigerian Naira against major currencies to policy missteps by the Central Bank of Nigeria (CBN). Currently, the Naira trades at approximately N1,400 to a dollar in the parallel market, continuing its downward trajectory. Despite the Tinubu administration’s decision to float the currency, there has been a slight improvement, which Utomi believes is exacerbated by the CBN’s actions.

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Utomi highlighted the significant role of the diaspora in bolstering Nigeria’s economy through remittances, which have traditionally supported the inflow of foreign exchange. However, he pointed out that technological advancements and entrepreneurship have shifted this dynamic, allowing direct financial transactions that bypass the Nigerian economy, thus not contributing to the country’s foreign exchange reserves. According to Utomi, this shift is partly due to the CBN’s recent policies, which have inadvertently encouraged such practices.

Addressing the economic challenges facing Nigeria requires a concerted effort from the country’s economic managers, Utomi suggests. Trust in the decision-makers and a strategic approach to policy formulation are essential for stabilizing the Naira and steering Nigeria towards economic recovery.

Editorial

The ongoing depreciation of the Naira underscores the intricate relationship between monetary policy and economic stability. Pat Utomi’s critique of the Central Bank of Nigeria’s role in this scenario sheds light on the unintended consequences of policy decisions on currency value. As Nigeria grapples with economic challenges, the need for a holistic and well-considered approach to monetary policy becomes increasingly apparent.

The CBN’s efforts to manage the Naira’s value must be aligned with broader economic objectives, including fostering a conducive environment for diaspora remittances and encouraging foreign exchange inflow. This requires innovative policy solutions and a commitment to transparency and stakeholder engagement across the economic spectrum.

As Nigeria seeks to navigate its way out of economic turbulence, the insights offered by experts like Utomi are invaluable. They highlight the importance of learning from past missteps and adopting a forward-looking perspective that embraces change and innovation. The path to economic recovery and stability is complex, but progress is within reach with informed decision-making and strategic policy implementation.

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Did You Know?

  • Diaspora remittances are a significant source of foreign exchange for many developing countries, including Nigeria.
  • The floating of a currency refers to a government’s decision to allow the currency’s value to be determined by the foreign exchange market, free from direct government control.
  • Technological advancements have revolutionized financial transactions, impacting traditional banking practices and monetary policy.
  • Trust in economic management and policy decisions is crucial for investor confidence and the overall stability of a country’s economy.
  • The Central Bank of Nigeria plays a pivotal role in shaping the country’s monetary policy, with significant economic growth and stability implications.

Author

  • Sharon Chima

    Sharon Chima is an Editor and news writer who loves sewing and interior decorating. She is devoted to her two daughters and will do anything for them. She's got a bright personality that always shines through in any situation, so she has no problem sharing who she is with the world! Sharon enjoys writing about her passions: sewing and interior decorating. And, of course, all things family-related. Email: sharon.chima@yohaig.ng

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