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Market forces should be allowed to determine the value of the naira, but you cannot do this half-way. When you say you are opening it up and you still list some items that cannot access foreign exchange at the official market, it is unnecessary. This is part of the beginning of the whole crisis.
The 41 items that you deny foreign exchange shouldn’t be banned. There are other ways that this can be managed. Where are the fiscal policies and when are they coming in? Grant everybody access to the foreign exchange market.
Whenever you don’t want to bring in certain items to the market, use the tariff method to indirectly ban them. If the tariff was 50 per cent before, raise it up to 100 per cent and it will be an indirect ban, rather than creating an artificial situation in the foreign exchange market. By banning those items from accessing foreign exchange, you have created a market for the black marketers to operate.
You are not saying importers of the banned items can’t bring them in, but what you have done is that you have created an avenue for the black marketers to flourish, because that is where importers of those 41 materials go to source foreign exchange.
This is what is pushing the price of the dollar upwards. Right now, the black market rate is what manufacturers use to price their products and this is the cause of the crisis we face right now. My position is that the naira should be left open and let the fiscal policies come to play. •Mr. Remi Bello (A former President, Lagos Chamber of Commerce and Industry)
There is no country that has completely left its currency to float anyhow. There is always guided regulation and I think the Central Bank of Nigeria will not leave the naira to float anyhow. They are not doing that right now and I do not think they have any intention of doing it. If they allow the currency to float, then speculators can hijack it and it will be ruinous to our economy.
I think that is why the CBN has taken the responsible stand of not allowing the naira to free float. Some people may say that Nigeria is having continuous decline in value compared to the international currencies such as the US dollars, Euro and pound sterling and they may ask: what is the best way to avoid further decline in value of the naira or even help it appreciate? If Nigerians are asking such a question, it appears that they think that government should have some magic wand to stop it. But there are fundamentals responsible for the fall of naira, they way it is.
Nigerians have a penchant for consuming imported goods. Some of the goods are garbage, but we infinitely love things that are imported. When people like imported goods excessively, there will definitely be a strain on our foreign exchange. It means there will be little foreign exchange available for critical interventions that can expand the factories and create jobs. Until Nigerians become more disciplined by reducing the pressure on our foreign reserve, we will continue to have the problem we are having.
I think the government should do more of import tightening control; more items should go on the prohibition list. There are some imported things that we can still do without. If you compare our country with our neighbours like Ghana, you will find a difference. Go to Accra, you find most of Ghanaians wearing local attire including their women and they look very beautiful and the sowings are very good but in Nigeria, people wear exotic foreign attires. Government should put very stiff import duties so that, if people still have a high appetite for import things and the prices are jerked up in a way that they pay more tax, then people will seriously consider indigenous products.
Go to Kaduna, most of our textile industries of the 1960s and 1970s are dead and jobs have been lost. We are no longer earning tax from them because there are substitute goods that are not necessarily superior to ours, but Nigerians like them anyway.
There should be strict control on what can and cannot be brought into the country. I am not for banning luxury items; let Nigerians who have money continue to use luxury items, but government should impose punitive tariff on them. If they want to buy it and they can pay for it, so be it. Until we do that, there will be increasing pressure on the naira and the government can do nothing about it. It is not about the government waking up one day to fix the naira at one naira to one dollar for instance, we cannot sustain it. • Mr. Fola Daniel (A former Chief Executive, National Insurance Commission)
We have seen the results of a few months of open market forces on the naira. It has led to astronomical increase in prices of goods due to the prevailing rate of the naira which has gone up to about N500. It is said to be N516 at the parallel market.
The untold hardship on Nigerians is getting unbearable.
Hence, from the experiences we are going through now, I will not support the idea of leaving the market forces to determine the rate of the naira, given the consumption nature of our economy as it were.
The option attempted obviously led us to very precarious conditions and has further devastated the poor among us.
Government has to consciously stimulate the export drive through monitored programmes that will tilt trade in favour of Nigeria.
The lip service being paid to growing the economy should stop for us to start as a nation. Unless we do this; Nigerians will be further impoverished as their purchasing power will be totally limited, the middle class completely eroded and the income of Nigerians generally meaningless. • Bunmi Fajobi (Chairman, Trade Union Congress, Ogun State)
The idea is within the statutory responsibilities of the CBN as the apex bank and key controller of economic indices. But the contentious issue at stake is that the Nigerian economy has organic problems considering the fact that a few corrupt individuals are richer than the federating states.
Leaving the naira to market forces will further aggravate the recessionary regime we are presently wallowing in. The CBN should be responsive to the prevailing circumstance and be responsible enough in its mandate to manage economy most efficiently. In the situation we are passing through, effective control is inevitable to take us out of the current economic disequilibrium. The economy must be improved through a turnaround strategy that will make us to be producer rather than consumer-centric economy. • Mr. Ola Azeez (Managing Partner/ CEO, Remolaz Management Consults)
The current foreign exchange policy of the Central Bank of Nigeria is not helping economic and business activities to flourish. It is one policy that has stifled economic growth.
The nation is almost down and equipment such as turbines and the likes needed for the construction of power plants, which the country so desperately needs, are mostly imported and foreign exchange is needed to purchase them.
Eighty per cent of the roads in Nigeria are either completely damaged or in terrible shape and need to be built or rebuilt. Therefore, foreign exchange is needed to obtain the machinery required to construct roads.
Hospitals too need to be better equipped with state of the art magnetic resonance imaging machines; dialysis machines, surgical and materials to transform them from mere consulting centres to actual magical care providers and all these require huge sums in foreign currency.
When these and many more segments of the nation’s economy need the scarce foreign exchange to acquire equipment that will result in value creation and accelerated growth of the Nigerian economy, it is wrong to allow addicts of luxury goods compete with them for foreign exchange at the CBN.
This is because the country’s currency is on a downward slide and many businesses and Nigerians are finding it difficult to access foreign exchange for business activities, educational needs, social and economic purposes. •Mr. Clement Adefulire (Managing Partner/Audit Leader, CPA Partners)