Adedipe: Naira undervalued at ₦1,600/USD
The Chief Economist at B. Adedipe Associates, Biodun Adedipe believes the improvements in major determinants of movements in exchange rate in Nigeria in the last six months suggest that the naira is undervalued at 1,600 naira to the US dollar. He notes more work is required in the official market than what Electronic Foreign Exchange Matching System and FX Code have done so far. Meanwhile, he highlights profiling of Nigerians for poverty by earnings rather spending is a disconnect from the culture that significantly differs from the American and European culture He joins CNBC Africa for this conversation.
Tue, 13 May 2025 14:01:38 GMT
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AI Generated Summary
- Adedipe challenges traditional measures of poverty assessment by advocating for a shift from earnings to spending as a more accurate indicator of economic well-being in African societies.
- The discussion on unemployment highlights the need for the Central Bank of Nigeria to take a more active role in driving job creation initiatives through coordinated monetary, fiscal, and trade policies.
- Adedipe's call for policy consistency and alignment across government agencies underscores the importance of holistic approaches to address poverty and unemployment challenges in Nigeria.
Chief Economist at B. Adedipe Associates, Biodun Adedipe, believes that the Nigerian naira is undervalued at 1,600 naira to the US dollar, based on recent improvements in key determinants of exchange rate movements. In a recent interview with CNBC Africa, Adedipe delved into the complexities of poverty measurement in Africa, highlighting the need to shift the focus from earnings to spending. He argued that in African cultures, where communal support and transfers are prevalent, traditional measures of poverty based solely on income fail to capture the full economic dynamics at play. Adedipe's perspective challenges the conventional Western model of poverty assessment, emphasizing the importance of understanding the unique social fabric of African societies. He suggests that by redefining poverty metrics to incorporate spending patterns, the number of individuals classified as 'desperately poor' could significantly decrease. Adedipe's insights shed light on the nuances of poverty assessment and the need for culturally sensitive approaches to economic analysis in diverse regions. Adedipe also addressed the issue of unemployment in Nigeria, stressing the importance of generating quality jobs to drive inclusive growth and reduce poverty. Drawing parallels with the US Federal Reserve's twin mandate of inflation targeting and unemployment, Adedipe proposed that the Central Bank of Nigeria (CBN) take a more proactive role in job creation initiatives. By aligning monetary, fiscal, and trade policies to prioritize employment generation, Adedipe argued for a comprehensive approach to tackle the country's unemployment challenges effectively. His call for a coherent and integrated strategy to address unemployment reflects a nuanced understanding of the interconnected nature of economic policies and their impact on job creation. Adedipe's recommendations underscore the imperative of policy consistency and coordination across government agencies to foster sustainable economic development in Nigeria. As the country continues its journey towards inclusive growth and macroeconomic stability, Adedipe's insights offer valuable guidance on navigating the complexities of poverty assessment and job creation in the African context.
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