Nigeria Can Fight for Naira’s FX Crises Through Fiscal Federalism

I want to wish those serving the best of luck as they architect policies. The latest is that Nigeria wants to raise $10 billion to support the Naira: “In response to the persistent challenges faced by Nigeria’s currency, the naira, the Federal Government has unveiled plans to raise $10 billion aimed at bolstering liquidity in the foreign exchange market.This announcement comes amidst growing concerns over the currency’s freefall, with the naira plummeting to an unprecedented low of 1,850 per dollar at the parallel market on Tuesday.”

Of course, anything which works is the best. Yet, I will also like to caution the nation to avoid a loop which could become a vicious circle where to fight today’s crisis, you need to raise money, and for tomorrow’s, more funds would be required at the debt market.

My position on this will be to look at critical anchors and enablers which can “wean” Nigeria of persistent currency paralysis. For a start, examine Nigeria’s fiscal architecture which has significantly affected our productivity and economic output. Indeed, can we consider looking at how to rearrange Nigeria?

Good People, if the leaders in the nation march to the National Assembly with a document on full fiscal federalism which will be put into motion within six months, Naira will appreciate to N650/$. That fiscal federalism will follow with Regional Police (not state police) to combate vices which are territorial.

(I am not in full support of State Police as our democracy is still immature to allow some governors to have full control of the Police. If that should happen, forget any opposition at the state level. Rather, I support Regional Police, like Southeast Police Force, under the control of the 5 governors with quarterly rotating chairmanship).

Under a regional government, Nigeria developed faster and during that period, exchange rate was never a problem as Nigeria built things and was productive. I do posit that we could return to that heritage if we organize around regions. The best “raise” to fight for Naira now is fiscal federalism where every region (or state specifically) will keep whatever it earns, and pays taxes to the federal government!

Nigeria Plans $10bn Raise to Tackle Currency Crisis

I want to wish those serving the best of luck as they architect policies. The latest is that Nigeria wants to raise $10 billion to support the Naira: “In response to the persistent challenges faced by Nigeria's currency, the naira, the Federal Government has unveiled plans to… pic.twitter.com/NGSPBWUSYk

— Ndubuisi Ekekwe (@ndekekwe) February 22, 2024

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