Economist and Director of Policy and Transparency, Kaduna Polytechnic, Ismael Mohammed Anchau has opined that if the Central Bank of Nigeria should have an interface or dialogue with the Binance, it could largely affect the restoration of the value of Naira.
Anchau in an interview with ARISE NEWS on Friday also said even though the recent decision to ban Binance is a right move, there are still concerns to be considered about its potential economic impact.
“On the Binance, I think it is a right decision but we have to be careful and look at the market dynamics, economic dynamics and the social dynamics. Now, Nigeria has the highest rate of unemployment which has to do with the youth.
“The youth are taking advantage of the binance, they are taking advantage of the opportunity provided by the crypto currency and the crypto currency or binance is determining the rates. It is like sapping the power of the CBN which is not right. So, there is need to interface with the binance.
“It is not just to ban them but to interface with them to find a way of talking to them in such a way this illegal activity of illegally determining the value of the naira would be stopped.
“To stop the activities of the Binance will also have certain economic impact on the economy because it is taking care of our unemployed youth. They are taking advantage of that to carry out certain businesses. It is providing them means of survival. So, even though it has disadvantages, it has advantages. If there is a positive interface with the Binance, the value of Naira will be restored.”
The economist also stated that despite the frequent increase in the Monetary Policy Rate (MPR), in an attempt to curb inflation, the results have been contrary to expectations as Inflation continues to rise, defying the conventional economic concept linking high inflation to low rate of unemployment.
“The issue of the monetary policy is an instrument used to stabilize finances or the economy. MPC has been used for long to stabilize the economy. If you recall between 2011 and 2012, the rate has been maintained at 11.5 to 12% which stabilized the naira.
“If you recall for about 2 years, even the black market rate of the naira had been 360-361 naira but after changing the rates, it began to change. The assumption is that the monetary policy or the bank rate in particularly is experiencing high rate of inflation which is at 29.9% which is actually very alarming.
“The MPR is supposed to be used to bring down the inflation but unfortunately, all these period that the bank rate has been increased severally, we have not seen inflation coming down. Instead, it is going up. The approach is even defying the concept whereby if the inflation is high, unemployment is supposed to be low. But in Nigeria, unemployment is high and inflation is equally high and so the monetary policy is not actually yielding results, even though globally, there is tightening. There is need for monetary authorities to look into this”
He further highlighted the urgent need for monetary authorities to reevaluate and adjust the economic models to reflect the peculiarities of Nigeria’s development level.
“There is need to remodel this economy’s models to reflect the peculiarities of the country’s level of development like during the world bank’s summit in 2023, there was need to look at the economic models because applying blindly.”
Chioma Kalu
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