It’s hard for a Venezuelan to know what to do with the feelings that get stirred up reading this New York Times OpEd about Nigeria:
Nigeria has pegged the naira to the dollar for decades, adjusting the exchange rate according to international supply and demand. But even as Nigeria’s economy has faltered, since last spring the peg has remained fixed at around 198.5 naira to the dollar. This rate is being maintained at the president’s insistence, undermining any notion of central bank independence.
To keep the rate fixed, the central bank has to preserve its foreign currency reserves, a difficult task as oil export revenue has fallen. How does it do that? By making it more difficult for Nigerians to obtain hard currency at the official rate. Primarily, the central bank has restricted access to foreign currency to importers who can demonstrate that the goods they’re bringing into Nigeria are necessary.
But Nigerians are innovative. A large parallel currency exchange has taken shape, in which importers trade naira for dollars at up to twice the official rate. The trade is too blatant to be called a black market. Last month, for example, I saw several currency exchange businesses at the Lagos airport that offered 380 naira to the dollar. Nigerian newspapers even include reports of the unofficial exchange rate.
I don’t mean to be too dismissive: Buhari is pursuing a miserable policy mix, and he’s liable to do real damage to millions of people’s livelihoods in the process. It’s just that, seen through Venezuelan eyes, the distortions Nigeria is seeing are – how to put this? They’re adooooorable! Just so little and cute and awwwwwwww…shucks, you just want to pinch those distortion in the cheek.
Nigeria is now where Venezuela was maybe 8 years ago. But think about that. One of Africa’s most legendarily screwed up petrostates draws gasps of horror from foreign observers for a macroeconomic framework that is…still about 100 times less crazy than the macro framework we have.
I mean, seriously…como no se pongan las pilas estos panas van a terminar venezuelanizándose.
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