IMPERATIVES OF NAIRA RE-DENOMINATION AS GLOBAL RECESSION LOOMS AFTER COVID 19 PANDEMIC., BY DR.GBENGA ADEOYE .

There is no doubt about the fact that,  very soon; countries all over the world will witness recession.

United State, Italy, Spain, China, United Kingdom among others are going through tough times.

There is no gain saying that the kind of COVID 19 that killed people in their thousands in other countries in Europe seems to lose the killing power when it arrives at our Shore in Africa and especially Nigeria.

For whatever reason; we have something to be proud of.

Like a Yoruba Proverb that I heard when I was in Primary School thus " A dirty person may not have everything but not that of Smell."

We may not have all the Medical  facilities which is as a result of bad governance over the years, but as for Immune System ..we are ahead of the world.

Having said that; when the crisis is over; Investors will.be looking for a country where $1m can be N400m or more.

What that imply is that; they need not engage in any serious productive economic activity. They will.merely operate in a rent economic system.

Let me break it down.

If an Investor comes in to Nigeria with $1m and he gets N400m; he can buy 10 houses of N40m each.

Having become a monopoly leader, he can sell at N60m shortly after and that oooi f course  to Nigerians...

He would have used $1 to now own N600m within a short time.

When a single dollar exchange for an amount as  huge as N400 and in fact about N415 to $1 in the parallel market yesterday; then Investors will come in and ride on us.

$1m is just 3.5m in UAE and as such you can only be times three and half richer in Dubai if you enter with your dollar.

Therefore; Nigeria should take step to prove that we are not foolish . We do know that  some Nigerians keeping funds in Dollar with intention to oppress us will not like it.

Any government that want Transformation cannot continue to do what the oppressors want always.

It is therefore imperative to see how we can bring $1 to exchange for N50 .

How can we achieve that.

We can re-denominate the naira. N1000 notes can then become just N50 or at worst N100.

I recall I was in Ghana at a time and they re-denominate their currency and today they are doing well.

One of the measures that Ghana put in place to control the value of Ghana Cedes in 2012  was that we went to Bank one day and we were told that all Domiciliary Account Cheque Book will no longer be honoured.

We were forced to withdraw Ghana currency equivalent. 

You can send any amount you like to Ghana in Dollar or Pounds as Investors but you cannot withdraw Foreign Currency out of your account.

Banks were honest and they obey their Apex Bank immediately. 

We can do something. 

It is shameful for anyone to come here and $1m becomes N400m . That margin is too wide.

All Banks can allow Dollar or any foreign currency but you will be paid equivalent in Naira.

Once that is done; we would have eliminated use of foreign currency as medium of exchange.

After some times..Naira will become so strong and then Imvestors will respect our country.

I suggest therefore to the Minister of Finance; Governor of Central Bank and other relevant Profesional Bodies to set this in.motion as we cannot continue to do things the same way.

Most of the BDC owners  operates a rent Economy.You get $1m from.CBN at 306 and sell at N400. Once that $1m.is sold, the BDC makes N94m instantly.(400-306). This is even a.modest rate as it has reached even N420 to a dollar in the last 3 weeks.

The Economic situation in.Nigeria does not require a Rocket Science approach. 

We need to be sincere .We need Economic Team that will take the Bull by the Horn.

We must not pretend as if we deserve such ridiculous exchange rate.

God bless Nigeria.

Dr. Gbenga Adeoye holds a PhD in Management Accounting.He is a Fellow of ICAN and a fellow of the Chartered Institute of Taxation of Nigeria.He is an Arbitrator  of UK and Nigeria.

He is the Managing Partner of Gbenga Adeoye & Co.( Chartered Accountants