As Nigeria moves to salvage its struggling currency, the naira, Economist, Dr. Ebo Tuckson has warned that the move could affect Ghana in the export of competitive products.
Nigeria, which is Africa’s most populated nation announced that it will allow its currency to trade freely in a move to tackle high inflation, improve its Balance of Trade, stabilize interest rates and stimulate growth for economic rebound.
The country in recent times has faced economic challenges such as high inflation, short supply of foodstuffs, shortage of fuel and high unemployment.
Speaking to an Accra based radio station, Dr. Tuckson was of the view that Ghana may be affected in the exportation of competitive products if Nigeria succeeds in devaluing its currency because it will be cheaper to export from there.
He explained that with the volume of trade transacted by Nigeria, devaluing the naira will not only boost economic activities but redirect trade export to the country.
“Once their currency devalues or depreciates then their exports will be cheaper, and it will be hard for us to compete with them on the export market,” he said.
He added that the effect will be premised on the level at which Ghana competes with Nigeria in the export of certain goods since with its current capacity, Nigeria commands over 50 percent of economic activities in the west African sub-region.
Touching on its effects on oil, Dr. Tuckson pointed out that the devaluation may not have any impact on the commodity owing to the fact that its benchmark price is determined at the world market.
“When it comes to oil, I don’t think there will be any impact on Ghana. You know that even though Nigeria is a major oil producer, it still imports the product and that is a challenge for them,” he said.
He maintained that with the current challenges faced by Nigeria, Ghana may not be far from experiencing similar challenges, recounting that the country has already witnessed some instability due to volatility in the economy.
He stated for instance that, it is important for government to control its debt stock while investing in the real sectors of the economy to stimulate economic growth.
Source Citifmonline