Obida Wafure of the
Economics Department, University of Abuja, says the recent devaluation
of Naira by the Central Bank of Nigeria (CBN) will have positive and
negative ripple effects on the economy.
Speaking with the News Agency of Nigeria (NAN)
on Thursday in Gwagwalada, FCT, Wafure, said that the devaluation would
encourage local industries and also bring about closure of many that
depend mainly imported raw materials.
NAN recalls that the CBN had on Tuesday
in Abuja announced the devaluation of Naira by N13 as part of measures
the bank said were aimed at strengthening the nation’s economy.
“Once a currency is devalued, there are
negative and positive effects to the economy, especially at the value
chain of every nation state, but the negative effect supersedes the
positive effects.
“The negative effect is that it will
increase the rate of importation and so many industries will be shut
down as they will not afford to import some raw materials.
“It will also lead to unemployment and
lower the production capacity and thereby bring about inflation as the
Growth Domestic Production (GDP) growth rate will fall.
“Our GDP growth rate is measured by the
activities in the economy, so by the time inflation is going on, the
economic activity of the country will fall.”
Wafure defined devaluation as when a
currency is deliberately lowered to the value of the money of one
country when exchanged with another country’s currency and depreciation
when lowered naturally.
On the appointment of the Minister of Petroleum Resources, Dieziani Allison-Madueke, as the first female OPEC President, he described the development as a step in the right direction.
He said that her appointment had lifted
the image of Nigeria and women, particularly in Africa and
internationally and would further encourage women.
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