August 16, 2007/Concerned Nigerian
I am worried about the naira revaluation. I believe that there other steps that should be taken prior to the revaluation. First, I do not believe that the CBN presently has firm control over the credit system in
This same policy has been tried in other countries and they failed.
We must be careful about this revaluation process. For example, an individual that has N1 million naira today, will now have N10,000 after the revaluation. A person whose house is worth N100 million today, will be worth N1 million after the revaluation. Will Nigerians accept this reality. Will a market woman who bought her fish inventory for N100 a week before the revaluation agree to sell it to you at N1 after revaluation.
Finally, after the revaluation, if the naira depreciates due to bad policies (i.e., higher interest rates, inflation, etc), the people whose naira were previously revalued will lose, but the property owners will just raise the values of their properties accordingly to reflect inflationary pressures.
My fellow investors, we have to be very careful about this policy. Mr. Soludo has done very well for the economy, but this current plan for the naira will be his toughest challenge yet.