Economic Alarm: Floating Naira 'Impoverishing Nigerians' Without Production, Warns Duke

Donald Duke, a former Cross River State governor and presidential candidate of the Peoples Redemption Party (PRP), has strongly criticized Nigeria’s current currency management policy. He argues that the decision to float the naira without simultaneously bolstering local industries and domestic production is exacerbating economic hardship for Nigerians. Speaking to journalists in Abuja, Duke also identified high interest rates, escalating fuel costs, and excessive government spending as primary drivers of inflation within the country.

Duke emphasized that Nigeria’s pervasive dependence on imported goods actively undermines job creation and hinders economic stability. He advocated for the government to proactively determine an appropriate exchange rate for the naira and then implement strategic policies to achieve and sustain that rate. He firmly believes that merely allowing the currency to depreciate without addressing the fundamental structural weaknesses of the economy is a flawed approach. “No country floats its currency. The currency is your economic worth. It is like floating your value. As a human being, what is your worth? Are you going to float your worth? You manage your worth. You manage your currency,” Duke stated, stressing the need for active currency management.

The former governor maintained that Nigeria must establish a realistic exchange rate and, crucially, develop the productive capacity necessary to support it. He highlighted that while foreign currencies are essential for importing necessities, it is paramount to foster local industries. He explained that floating the currency in the absence of robust local production only further impoverishes the populace, as everyone resorts to importing, thereby exporting jobs. Duke questioned the logic of celebrating a stronger naira without addressing the underlying import dependency, stating, “if the naira becomes one naira to two dollars, everybody will clap. But how can you just keep on importing more?”

Duke asserted that Nigeria should strategically reduce its reliance on foreign goods by identifying and prioritizing products that can be manufactured domestically. This approach, he argued, would conserve valuable foreign exchange reserves and generate significant employment opportunities within the country. He noted that other nations deliberately pursue policies to safeguard their economic interests and stabilize their currencies, suggesting Nigeria adopt a similar strategy focused on strengthening domestic production. He advised looking at what products are currently imported that could be produced locally, emphasizing that “doing it in Nigeria, we’ll be creating jobs for our people. And if you’re creating jobs for our people, you’re creating economic stability for your people. As long as you continue importing, you’re creating jobs overseas.”

Furthermore, Duke lamented the neglect of the balance of trade in Nigeria’s economic policy discussions. He stressed the importance of understanding the relationship between a nation’s imports, exports, and foreign investment. “Balance of trade is: I buy so much from you, you buy so much from me. If I have nothing to give you, then you invest in me,” he clarified, underscoring the need to balance what goes out with what comes in.

Regarding monetary policy, Duke criticized the Central Bank of Nigeria’s (CBN) high interest rate regime. He argued that the exorbitant cost of borrowing stifles investment and restricts businesses’ access to vital funds for productive activities. While acknowledging that the CBN governor defended high interest rates as a measure to combat inflation, Duke contended that this approach fails to adequately address the actual drivers of rising prices, particularly fuel costs and transportation expenses. He illustrated this by saying, “interest rates don’t cause inflation. The price of your fuel causes inflation. The high cost of your fuel causes inflation because everything moves through transportation.” He concluded that current interest rates make borrowing unattractive and unsustainable for many businesses.

Duke also condemned what he described as excessive government expenditure, particularly on imported goods. He urged public institutions to prioritize locally manufactured products. He explained that by producing goods locally and patronizing domestic industries, pressure on exchange rates would lessen, jobs would be created, and economic growth would be localized. On political leadership, he stressed that competence and the quality of appointments are far more critical than age. He also expressed concern over the increasing influence of political considerations in government appointments at the expense of effective governance. Finally, Duke expressed anticipation for upcoming presidential debates, hoping they would feature substantive discussions on policies and solutions to Nigeria’s challenges, specifically mentioning Adewole Adebayo and Peter Obi as candidates he hopes to see engage in such debates.