There has been several media reports in the last few days concerning Dr. Ubah's audacious claim that he has a 4-point plan to bring down the exchange rate to N200/$ within a month. He, therefore, requests the FG to appoint him the Chief Consultant on Financial Stability.

I made an initial comment on the subject where I explained the determinants of exchange rate and why Ubah's claim may be a little far-fetched (https://www.nairaland.com/2949228/ifeanyi-ubah-bring-us-dollar-n200#43148209). However, I have been called out for being too academic in my analysis and why I should not dare challenge a successful business man who has racked up over $2b in assets in the last 9 years. Others have opined that he should be given a chance to offer his ideas, after all he is not asking for money and had even helped the country out during a period of severe fuel scarcity. Now, let us look at a few issues together:

(1) Has Dr. Ifeanyi Ubah made a formal proposal to the government regarding his offer? This way the government can have a basis of inviting him for a meeting. If the government were to invite Ubah based on his media claims, then that would give him so much leverage - something the government cannot afford.

(2) The CBN, under the last administration devalued the Naira twice - first from N150 to N168 and then from N168 to N197 - within a period of 4 months. Has anyone wondered why Ubah did not offer to help the then administration get the exchange rate back below N150/$, if he indeed had such magic wand?

(3) How did Ubah arrive at the N200/$ figure? Does he have full knowledge of the aggregate SUPPLY and aggregate DEMAND for dollars to be able to come up with that equilibrium price? I can bet that it is only the CBN that has data on Nigeria's Balance of Payments, and so can determine an ideal exchange rate.

(4) Even if Ubah were to, somehow, infuse over $1bn into the market within a month, and that extra supply pushes the exchange rate to an artificial N200/$, what happens after that? Does Ubah have billions of dollars to continue propping up the market every month, else the rate will deteriorate again? Obviously, he is a very smart man - he had said he will get the exchange rate back to N200/$ within a month - and so will claim that his mandate doesn't go beyond 30 days.

(5) Why does Ubah need to be appointed the Chief Consultant to the FG on Financial Stability before he helps his country? He had helped before during the period of acute fuel scarcity without asking for any appointment from the previous administration.

(6) Are there any legal basis for the government to seize the assets of a consultant which they appointed? Ok, Ubah says they should if he fails, but I can bet that there would be a lot of legal wranglings sentimental outcry should the government goes ahead to do so.
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The reality is that some of the DEMAND for dollars have been speculative attack. However, there are still legitimate DEMAND (e.g. 41 de-listed items) that the CBN cannot fill and so will push the rate at the parallel market. The fact is that once you discount speculative demand, the true exchange rate may be found around the N240 - N280 band in the parallel market. N200/$ at this time without sustained SUPPLY or heavily reduced DEMAND might still be a bit farfetched.
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@Bevista

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So since he made the statement haven't you heard if something strange happening in the market?

psucc:
So since he made the statement haven't you heard if something strange happening in the market?

There has been some blog reports that the market is reacting to his statement. However, most mainstream media reports have it that the appreciation of the Naira recently is based on the President’s insistence of no devaluation.