In a critical assessment of the impact of major policy reforms by the Tinubu administration, Andrew Uviase, Managing Partner of Ecovis OUC , a leading consulting firm specializing in tax, accounting, auditing, and compliance services, explains why market forces should not be completely allowed to determine the value of the Naira as well as the need to fix the nation’s refineries before fuel subsidy removal.
I think the policy of the current administration is to allow market forces of demand and supply to determine the value of the Naira. Theoretically, market forces are the most suitable mechanism for allocating scarce resources and for correcting distortions in the FX market. However, this position rests on a critical assumption of many economic agents on both the demand and supply side. That is the assumption of perfect competition.
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