In a bid to strengthen the naira, the central bank
OF Nigeria h(CBN) shocked speculators by injecting over one billion US
Dollars into the market. Between the middle of February and early this month.
This concerted has made Naira to appreciate. However the ripple effect of this
effort is not felt as price of goods remains constant. COVENANT UMORU and ABEEB
ALAWIYE write.
At the onset of economic recession which
dramatically engender the exchange of the dollar against the naira the effect
was felt almost immediately, as traders without hesitation inflict the price of
Goods even before the recession began to take its toll on the economy.
According to a market survey, in markets in Lagos confirmed that price of goods
has proliferated by over 70 percent. At this point, the chorus on the lips of
most traders is “dollar don rise” with an inadvertent effect on price, owing to
the fact that most goods are been imported. However, what struck a chord, is
how goods that are source locally with no bearing with the exchange rate also
witnessed a sharp increase in price. Therefore, it was obvious that traders
were latching on the exchange rate to exploit consumers.
The central bank of Nigeria has risen to the
occasion, kudos to its recent interventions in strengthening the naira. As
earlier stated, the CBN has injected over one billion US dollars into the
market, thereby increasing the value of the naira against the dollar.
The spokesman of CBN, Mr. Isaac Okorafor, earlier
this week gave a palpable relief to the masses when he stated that The Naira is set to appreciate further in the week as the
Central Bank of Nigeria (CBN) plans to inject more Foreign Exchange Forex into
the market to meet the requests of genuine customers. Mr. Isaac stated that”
the apex bank had so far kept to its promise of continuing to supply enough
forex to guarantee liquidity in the market”.
The statement said the bank was
committed to ensuring that authorized dealers got sufficient supply to meet the
demands of authentic customers of banks.
However, the irony that we are
confronted with is the total absence of the ripple effect of the recent CBN
intervention in the forex market. It is most presume that there will be a
decline In the price of goods as against its stagnant nature.
In a discuss with artisans, most of their views are
hinged on traders exploiting the masses.
Ayotunde Akintan,a university graduate
noted that the only thing that does not come down when it goes up is the price
of good in Nigeria. “there have not been any significant effect since the CBN
started injecting funds into forex .the price of everything is still the same.
Owode Aduloju ,a drummer and
choir coordinator, describe the current stagnation in price as normal.
“It is not surprising if the price of goods remains
stagnant. Once there is an increase in price it will not come down even if
governments intervene”. He noted that since the beginning of the recession he
has been buying half bag of rice for eight thousand and few days ago he still
bought it for that price despite naira appreciation.
Tadema Joseph ,a legal
practitioner describe it is a phenomenon that is not in Nigeria character. In
his words, ones there is a rise in price it is difficult for an average
business man to respond accordingly when the time for reduction comes, they
will prefer to peg the price there unless the price is force down by market
forces.
He therefore advised that the only way
the price of consumable produce will decline is if the federal government
invests more on products that are source locally, and also monitor the market
forces that determines price. “this will to a large extent reduce hardship in
the country”.
Chucks Philips the CEO of laser
investment ltd. Corroborate the assertion that the hike in the price of goods
can be traced to the exchange rate. Recounted that dollar is the international
accepted means of exchange that they used in buying goods. Therefore, they have
to convert naira to dollar before they can access goods outside the shores of
the country.
Speaking on why the prices of products
have not declined since the naira is gaining strength, he noted “it has
actually reflected in the market, we expect the naira to gain more strength
because its present state is insignificant in the market. “
“The naira has to appreciate further
before it can have a ripple effect. The prices are still the same, but
subsequently we hope to see changes as the naira gains further.”
“However, it is going to be gradual
process because a lot of factors are involve, it does not just come down the
way it went up.
Chucks, stated that the price of
laptops that sells at eighty thousand increased to one hundred and fifty
thousand, and it is yet to drop.
Having aired the opinion of people on this issue, it
is important to note that recently there is indeed change at the parallel
market in which naira gained more
strength to dollar compared to months back when it crashes and with the
relentless effort of Central Bank of Nigeria (CBN), to bring things back to
normal and even better than the way it was before.it is also pertinent
to observed that their effort have not reflected in the trading world as
the price of goods still remain static with no effect even though some people
sees this as a God given opportunity to increase the price of their goods .
Also, price regulating agency should be constituted
to help savage the masses from the sneer of exploiters, who have leverage on
the recession to maximize profit.
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