By Milcah Tanimu

Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria, has criticized the notion of the naira stabilizing at N400 to the dollar, deeming it unrealistic.

In a series of posts on his social media account on Sunday, Moghalu expressed skepticism about the feasibility of such an exchange rate, emphasizing the need for the naira’s value to reflect its market reality rather than artificial manipulation.

He argued that maintaining an artificial exchange rate, as seen during the tenure of the Emefiele-led central bank, only served to facilitate massive arbitrage by speculators, resulting in detrimental effects on the economy. Moghalu highlighted Nigeria’s lack of a robust productive export economy and insufficient foreign reserves as factors complicating the situation.

Addressing the pathway to addressing the currency challenges, Moghalu stressed the importance of transitioning towards a value-added manufacturing export economy, diversifying beyond oil. He emphasized the critical role of resolving the longstanding electricity deficit in stimulating economic growth, pointing out the dismal power generation capacity relative to Nigeria’s population size.

Moghalu underscored the potential unleashed by a substantial increase in power generation, citing examples from countries like South Africa and Brazil to illustrate the transformative impact of adequate electricity supply on economic activities and entrepreneurial endeavors.

In essence, Moghalu’s remarks highlight the complex economic realities facing Nigeria and the imperative of implementing structural reforms to foster sustainable growth and stability in the foreign exchange market.