Economists have expressed conviction that the value of naira will fall further in the global financial markets. This is as the campaign for the 2023 general elections began on Wednesday, September 28, 2022.
Warning that politicians and their allies should be restricted in their spending, especially in dollars, Sherrifdeen Tella, a Professor of Economics at the Olabisi Onabanjo University, Ago Iwoye, Ogun State, stated that there would be dire consequences for the country.
“If it is foreign currency, the economy will be awash with a lot of foreign currencies which on the one hand is good. But on the other hand, it is bad because it will cause a lot of inflation. It will further depreciate the naira because people will start changing the foreign currencies to naira that they can spend, and that will cause a further depreciation of the naira. That will result in a higher level of inflation because of the fact that it will lead to a higher cost of production,” Tella explained, maintaining that the Central Bank of Nigeria (CBN) needs to be more proactive during this period.
Sharing Tella’s sentiment on the fate of the naira, Prof Usman Muttaka of the Ahmadu Bello University, Zaria, Kaduna State, raised a similar alarm.
According to him, the CBN’s Monetary Policy Committee might respond to the rising inflation by raising the benchmark interest rate, following which politicians might leave the economy with excess liquidity.