The Demise Of Naira: Foundation Built On Shifting Sand

By Emeka Chiakwelu

“… Likened unto a foolish man, which built his house upon the sand: And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell: and great was the fall of it.”-Matthew 7:27

By now we all know the story of naira, the value is collapsing and its malleability threaten the dwindling Nigeria’s economy. To be candid, there is no need to beat around the bush; the whole truth is that the future of naira as a principally medium of exchange is very bleak, if not in doubt.

The implication is not that Nigeria’s reserve bank will abandon naira as an operating currency and come up with another currency with a new nomenclature and different denominations. Not in affirmative, the mechanics of operation of a prevailing currency is its acceptability. As the participating marketers in a base monetary market losses interest in a given currency, then its function as an instrument for business transaction will be dramatically diminished. This episode will open door to the introduction of foreign currencies in a local transactions.

In this case, international currencies specifically dollars and pounds will displaced local naira in trading, commercialization and transaction on consumer market level. This scenario has already started happening with naira. Nigerians are now more interested in dollars than in naira. Even using dollar as an indicator to measure and deduce the price and value of a commodity in the supposedly naira dominated sphere. This implies that dollars and pounds are acting as a’ gold reserve’ for naira.