Etcetera. Photo: Filed.
The expatriates in Nigeria are having the best of times. There is never going to be a better time to be paid in foreign currencies in Nigeria. And while President Buhari is busy trying to out-tour Rihanna, discussions on the fall in the naira have brought up macro-economic matters such as slowing down of economic growth, corporate earnings and market volatility. For the common man on the street, the falling rate of the naira is hurting the most.
From essentials such as food and education to foreign vacation and the hi-tech gadget you plan to buy, the falling naira will hurt you in more ways than one.
Not too long ago, President Buhari and his economic advisers called for ‘a weaker currency.’ Now that we have one; their silence is deafening.
Had it been that Nigeria exported anything, a weaker currency would make it easier for exporters to compete internationally.
You don’t need to be as high up as the president to know that the disadvantages of a weaker currency are much more harmful than the possible benefits. The most obvious disadvantage is that we are all poorer because of the naira’s weakness. Everything that is denominated in naira is worthless today than before the collapse of the currency. This includes wages, shares, houses, pensions, foodstuff, everything.
Some prices adjusted automatically and quickly to the fall in the naira, but in most instances, it will take a long time for all prices to ‘catch up’ to previous levels. Wages and salaries are good examples of prices that will take time to reach previous levels.
Since certain prices adjust faster to the new level of the naira, all sorts of distortions will take place in the economy. Many asset prices, especially liquid assets like listed shares, usually adjust quickly to the weaker currency. But prices …Read More
Source:: The NET