Nigeria Needs Prices That Work

Nigeria took a step toward economic sanity Tuesday by announcing plans to let its currency weaken. Africa’s largest economy is facing recession, and exchange-rate flexibility will help it cope. For best effect, those plans should also include junking the foreign-exchange controls that have blighted its businesses and scared off foreign investors.

Nigeria’s currency, the naira, has been pegged at about 200 to the dollar since March 2015 -- a policy that President Muhammadu Buhari has defended. Oil exporters from Russia to Colombia let their currencies depreciate when the falling price of oil hit their foreign-exchange receipts; Nigeria tried to shield consumers and businesses from inflation by propping up the naira and keeping imports cheap. It didn’t work. Inflation hit a nearly six-year high last month.