THE NIGERIA -CHINA CURRENCY DEAL: THE GOOD AND THE BAD
One good thing about economics is that no answer to any economic problem can be generally accepted. When economists fail to have divergent views about a policy or the process of its implementation, the policy must be the one thrown down from heaven.
It's not a very bad idea to go to China. The West had disappointed us in several ways. The West, through the assistance of today's ruling party abandoned Nigeria in the face of sectional terrorism. How can we explain the arms embargo when our innocent brothers are killed and our sisters turned into sex slaves in the Sambisa forest? America is mean. Any leader in Nigeria that decides to move Eastward, may be right.
Among other things, the journey to China and the currency deal would reduce the effects of dollar on the Nigerian imports. Definitely, the prices of commodities will systematically fall. This will surely favour the informal sector. While you jubilate, there is one question that should be answered here. Does Nigeria wish to have China as the only trading partner?
However, while we perceive the deal as a movement from dollar bondage, we also know that it is a new movement to Yuan bondage. China is the biggest threat to our GDP. Definitely, the deal will not encourage our manufacturing sector. What then is the cause of our jubilation?
In conclusion, the Nigerian government should pay attention to the policies that encourage the rise in value of the American dollar in terms of the Nigerian naira. Unless this is done, any other measure taken with China and yuan is simply temporary.
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