The problem with the Naira today is not that it was or has been “floated”. In any case, we no longer have the oil revenues (for various reasons) to underpin a managed float with robust foreign reserves.
The real failure of Nigerian economic policy is that of having failed to diversify its economy away from reliance of natural resources for forex supply towards an export economy based on value-added manufacturing and services.
This is the zone of industrial and trade policy. The reason for this failure lies in Nigeria’s political culture that fosters a rentier economy.
Habits, especially bad ones, are hard to break. But Malaysia, Thailand and Chile, all originally resource based economies, successfully achieved “economic complexity” over time, manufacturing and exporting increasingly sophisticated products.
For Nigeria to achieve this will require what its present generation of politicians appear to lack, for you cannot give what you do not have. The level of political will required to change course is extraordinary, and requires a focus on merit and competent technocratic management rather than crony- empowerment based on vested self interest.
Until these fundamentals are fixed, there is little hope for the Naira. The world has changed from the days of our being awash with oil money. Many other countries that are not in OPEC now produce massive amounts of oil.
Kingsley Moghalu
