What we know: Expected exchange rate after N1000/$

For several weeks now, the exchange rate on the street had been around N1000/US$1. Then, the Central Bank made a few important policy decisions; and most people expected the rates to come tumbling down. They remain stubbornly at about N1000/US$1.

The most obvious question right now is: what should we expect from now on with the unification of exchange rates? There are several inevitable repercussions on account of this policy change for all stakeholders. There are also unpredictable consequences of the changes which are contingent on the fiscal and monetary policies adopted by the Federal Government.

Already, there are signs that apart from the changes at CBN, it would appear that RENEWED HOPE is bearing a frightening resemblance to Buharinomics. Unless a sudden change occurs, the exchange rate may trend towards N1200/US$1 by the first quarter of next year.

Begging bowl out again: $1.2bn loan application

“At a time of higher debt levels, the rapid transition from prolonged period of low interest rates to much higher rates… inevitably generates stresses and vulnerabilities” – Kristalina Georgieva, MD, International Monetary Fund, IMF.

Poverty, whether personal or national, brings disdain. Nigeria’s Minister of Finance and Governor of Central Bank of Nigeria, CBN flanked the IMF MD in a photograph in Morocco recently. There was no doubt who was the “boss”. Nigeria is again playing its familiar role of beggar.

The FG is seeking two loans from the World Bank at once. Invariably, such loans are not granted unless the borrower satisfies certain conditions imposed by the IMF. Because this loan request follows the same pattern as most of Buhari’s loans – borrow-and-spend on paying salaries and give-aways to the poor – the IMF has stepped in to dictate to us a set of policy decisions which Nigeria should take. Some of them are akin to poison right now.

“IMF proposes more taxes, higher interest rates after subsidy removal.”