Former Deputy Governor of the Central Bank of Nigeria, Kingsley Moghalu, has revealed how the bank was able to keep the naira stable versus the dollar for five years, from 2009 to 2014.
During an interview with PUNCH, Moghalu, who served as the top bank’s deputy governor from 2009 to 2014, stated this.
Nigeria has struggled with a falling naira in recent years, which Moghalu, a member of the Advisory Council of the Official Monetary and Financial Institutions Forum, believes may be reversed with the appropriate reforms and policies.
Speculators’ activities and the apex bank’s lack of autonomy, according to Moghalu, are to blame for the naira’s downward trend. During that time, he said, the apex bank worked on restoring investor trust.
He said, “We worked very hard on the matter of the exchange rate because we wanted to create a very investment-friendly climate for both local and foreign investors in the Nigerian economy and we knew that one of the keys to that was a stable exchange rate”.
“So, we made sure that you could bring in your money for investment in Nigeria and take it out, 100 per cent, it’s yours, with no real complications, that gave investors’ confidence”.
“We, of course, had high oil prices at that time which also was helpful. So, the reserves were never really above the early 40s, in terms of billions of dollars”.
Moghalu, a previous presidential contender for the Young Progressive Party in the 2019 race, said the apex bank’s leadership made many steps to clean up the system by implementing reforms that stabilized and opened up the economy to business.
“It was just the way we managed the Central Bank’s responsibilities in the economy in general – the banking reforms that we did; we cleaned out the system, we stabilised it and we opened it up for business”.
He cited the creation of the Bank Verification Number and the acceptance of technologies such as payment systems as examples of their many accomplishments.
“We laid the foundation for the fintech boom that we are enjoying today. We introduced a lot of payment system innovations like the Bank Verification Number when I was deputy governor of operations and responsible for the payment system reforms”.
“It’s a whole set of factors that contributed to our success,” he added.
From June 2009 to February 2014, Moghalu served as a deputy to Sanusi Lamido Sanusi, the then-CBN Governor.
Both Sanusi and Moghalu commanded the apex bank under the administrations of late President Umaru Yar’adua and then-President Goodluck Jonathan. The naira stayed constant at around N150/$1 during this time.
The naira, on the other hand, has been on an unexpected downward trajectory since the start of the present administration of Muhammadu Buhari (retd.) and the leadership of Godwin Emefiele as CBN Governor. At the I&E FX Window, the CBN’s only official rate, the naira is now trading at around N412/$.