FG Secretly Devalues The Naira; Now N290 To $1

 Several news sites are reporting President Buhari has decided to devalue the Naira. Here’s an excerpt from SaharaReporters:

Our sources said Buhari and his economic team took the decision to accept the IMF’s terms for funds that the Nigerian government wants to access to bridge a critical shortfall in revenue occasioned by a drastic decline in oil revenues. An administration insider told SaharaReporters that Nigeria could receive as much as $3 billion in credit facilities from the IMF.

“The truth is that Nigeria cannot operate without sourcing credit from the IMF,” said one of our sources, an economic adviser to Mr. Buhari, who spoke on condition of anonymity. “And the IMF was adamant that we must devalue before they can discuss extending credit to us,” he added.

Our sources said Buhari and his economic team took the decision to accept the IMF’s terms for funds that the Nigerian government wants to access to bridge a critical shortfall in revenue occasioned by a drastic decline in oil revenues. An administration insider told SaharaReporters that Nigeria could receive as much as $3 billion in credit facilities from the IMF.

“The truth is that Nigeria cannot operate without sourcing credit from the IMF,” said one of our sources, an economic adviser to Buhari, who spoke on condition of anonymity. “And the IMF was adamant that we must devalue before they can discuss extending credit to us,” he added.

Curiously, administration officials took the decision to devalue the Naira without the input of the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, another source revealed. An official of the CBN confirmed to SaharaReporters that bank executives were kept in the dark about the discussions that led to the Buhari administration’s decision to devalue the Naira. “Some of us here [the CBN] are not opposed to devaluation, given our country’s present circumstances,”the source said, adding that it was the CBN’s function to pilot Nigeria’s monetary policies.

One of our sources pointed to the fact that the Naira has been weakened in the parallel market, where it now sells at N360 per dollar. “The government cannot continue to operate under the illusion that the Naira is stronger than it is. The only problem is that we did not start early enough to admit to Nigerians how bad the financial outlook was,” the source added.