‘N500 stronger than $1 on the streets’

Former President of Chartered Institute of Bankers of Nigeria (CIBN), Segun Ajibola, said N500 is enough for a Nigerian to feed, as he defends the naira against the dollar.

Ajibola said the naira is strong when spent locally, but the dollar and pounds are not useful in their home country, he said during an interview with NTA on Wednesday.

The banker-turned lecturer explained that $1 or £1 have no value to purchase an item in their originating country, but the equivalent of the forex in naira, above N500 will feed the average Nigerian.

Ajibola, who is a Professor of Economics at Babcock University, double down by stating that naira has real value compared to foreign currencies, which he said amount to nothing meaningful on the streets of London and New York.

“The national currency is a reflection of the state of any economy. It encapsulates the strengths and the weaknesses of that economy.

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“Over the years, we have seen a slide in the value of our national currency. In the 70s and 80s, almost 2$/N1, today we are talking of over N500 (per dollar).

“Our naira is still very strong locally. With N500, an average Nigerian can still feed himself or herself today but when we look at N500 in terms of a dollar or a pound sterling equivalent, you can’t do anything with one pound on the street of London, you cannot buy anything meaningful with one dollar on the street of New York.

‘Therefore, there is a disconnect between what the real value of our naira commands in Nigeria vis-à-vis outside. In economic parlance, we talk about purchasing power parity, what is the real value of the currency compared with the value of currencies outside that jurisdiction?

“We discover that our local currency as naira is still in a position to command some value within the country but outside the country, we have a problem.” He said during the interview.

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