Forex Scarcity: Nigerians Call For Use Of Locally Made Goods

by Jonathan Adams

IN the face of the scarcity, rising and fluctuating forex rate which is hurting Nigeria’s economy, Nigerians have yesterday expressed optimism of the Naira regaining its strength, while urging government to quickly diversify the economy and unveil its economic agenda.

Speaking to The Guardian on the forex crisis, an economist and Acting Head Enugu-based economic institute, African Heritage,

Mr. Chiwuike Uba lamented that, over the years, no real investment was made to diversify the economy by improving the business environment, and that while investments in social sectors kept declining, security votes were increasing.

He said: “The best approach to work ourselves out from the present situation is to quickly diversify our economy from oil. Government needs to put in place concrete strategies to industrialise the country.”

“Agriculture and solid minerals should be made one of the major exports of the country. In order to develop the solid minerals sector, there is need to remove it from the exclusive list. Agriculture must be treated as a business as well as a right.”

“To achieve these, government must develop a clear, implementable and sustainable agenda, which ultimately will revolve around a development plan that will deal with the issues around our major development challenges. The development agenda must be shared and well communicated to Nigerians.”

“For transparency purposes, our annual budget must show in clear terms and figures what the annual “subsidies” by way of “waivers” are. Subsidies and waivers are monies that would have accrued to the government if not given as subsidies and waivers.”

On the call for Naira devaluation, the economist said it is important to state that Naira has not been devalued, hence the question of further devaluation does not arise.

“What has happened so far is the depreciation of the Naira. Many people have argued either in favour or against Naira devaluation. However, I do not subscribe to the devaluation of the Naira; rather, I would recommend independent floating of the Naira. The CBN is currently using the managed float exchange rate management system.”

“The question that arises is: what factors determine the managed float rate? My best bet is to encourage market forces (demand and supply) to determine the exchange rate at any given time. This is important given our depleted foreign reserve and declining oil price. Who knows, using the concept “independent float” instead of ‘devaluation’ may be better as it saves us the negative perception attached to currency devaluation.”

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