A former senator and Chairman of the 8th Senate Assembly Committee on Banking, Insurance and other Financial Institutions, Dr. Rafiu Ibrahim, has proferred solutions to the Nigerian Naira devaluation.
Dr. Ibrahim urged the Nigerian Government and regulatory agencies on monetary policy to relegate politics to the background and allow economics to rule and reign on the issue of Naira exchange rate and the market to determine its fair value both at the time of boom and otherwise.
The former senator also advocated promotion of local production and industrialization, particularly of products that are highly in demand.
Ibrahim said this in a paper he delivered at the 30th edition of Media Parliament of the Kwara State Council of Nigerian Union of Journalists (NUJ) held in Ilorin, the State capital.
In his paper titled, “Naira Devaluation by Central Bank of Nigeria: How Did We Get Here? What Are The Challenges and Prospective For Us As Nation?”, the former legislator recalled that attempts made in the past at liberalization were in the right direction but required financial discipline to provide savings for the future challenge.
He added that the time was ripe to diversify the economy under a truly long-term strategic plan that would turn around the fortunes of the nation away from being mono-product.
Senator Ibrahim also called on the government to address the incessant insecurity that had eaten deep into the economic life of the nation, warning that the devastating effects of the situation, if unattended, would make the value of the nation’s currency worse.
“It is important to state that the politicization of the exchange rate of the Naira is an unhealthy obsession in Nigeria.
“It only gives politicians an incentive to wage war against reality by doing things that are economically harmful,” he said.
According to him, the attempts made in the past to embrace liberalization is a step in the right direction, but should have been also backed with some high level of financial discipline that would provide savings for the rainy day, stressing that the very act of trying to fiddle with the currency whenever we run into trouble is what really needs to be re-examined.
“It is only in Nigeria that you see a situation where people pray and hope for high oil prices to sustain their spending pattern without saving, while the government wanst to keep the exchange rate ‘stable’ even when revenues have collapsed dramatically.
“We all know that it is not possible to have all these things at the same time, as you cannot eat your cake and have it at the same time”, Ibrahim said.
The former legislator, a financial expert and consultant, who represented Kwara South Senatorial District in the eighth Senate, said that Nigeria, being a monolithic economy was enough reason for it to be futuristic in its savings and investment policies.
He cautioned that the politicization of the exchange rate has become an unhealthy obsession in the country, warning that such move only empowers the political class to do more harm to the nation’s economy.
In his remarks, the Chairman, Kwara State Council of the NUJ, Abdullateef ‘Lanre Ahmed, said the volatility of the exchange rate was baffling, hence the urgent need to address it, especially its adverse effects on the local economy.
Ahmed traced the problem to the somersault of the Central Bank of Nigeria on the nation’s monetary policy, which has consistently weakened the Naira in the global economy and, in turn, affected the purchasing power of the masses.
“Similarly, the penchant of the federal government for external borrowing is now at an alarming proportion, thus accentuating claims and counter-claims on the desirability or otherwise of the government’s step ” Ahmed lamented.
