USA to press Buhari for naira devaluation

USA official says Nigeria should try to make the exchange rate more realistic – Naira devaluation will be discussed with Nigerian officials on Thursday The United States of America has announced its decision to press on President Muhammadu Buhari in talks this week to adopt a more flexible exchange rate. Linda Thomas-Greenfield, assistant secretary for Africa, speaking with the audience at the U.S. Institute of Peace said that the rate should be “more realistic.” She said: “While most people complain about the possibility of there being a devaluation, people are already operating on a devalued currency, and the only people who are not, are people who are doing it officially.

“Our recommendation is, and we will have discussions about it … that they should look at the exchange rate and try to make the exchange rate more realistic to what the value of the naira is to the dollar.” Thomas-Greenfield said the black currency market in Nigeria was “alive and well,” saying that inflexible naira rate can destroy President Buhari’s plans to expand economic growth and anti-corruption crusade. “Capital controls that limit access to foreign exchange rewards insiders and undermines the stated goals of Nigeria to increase domestic production because both Nigerian and expat investors alike tell us many businesses are unable to obtain the capital to purchase badly needed intermediate goods,” she added. The naira black market rate is currently some 40 % below the official. The CBN last year pegged the exchange rate to control speculative demand for the dollar.

Thomas-Greenfield spoke ahead of talks in Washington on March 31 involving officials from the State Department, Pentagon and Treasury and their counterparts in the Nigerian government. President Buhari has several times restated that Nigeria won’t kill naira through devaluation. The president said that letting the currency fall would only result in higher inflation and cause hardship for poor- and middle-class Nigerians.