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‘No shortcut to success’ — Ned Nwoko asks CBN to tackle issues causing naira depreciation
Ned Nwoko, senator representing Delta north, has advised the
federal government and the Central Bank of Nigeria (CBN) against measures
capable of “artificially” forcing the naira to gain value against other
currencies.
Nwoko spoke in a statement in Abuja on Saturday, according
to NAN.
He told the CBN to “concentrate on tackling the main issues
responsible for the naira depreciation”, adding that “there is no short-cut to
success”.
The politician said the quest for economic freedom and the
strength of the nation’s currency is an ongoing journey.
Nwoko also said the continuous revisit to previously implemented
policies and considerations of new ones is imperative.
He said the value of a sovereign nation’s currency is the
cornerstone of respect and collaboration among nations, reiterating that
Nigeria must stimulate naira demand.
The businessman said as a nation that exports crude oil and
other commodities globally, “it is imperative that all transactions on these
items be conducted exclusively in naira”.
“This will incentivise buyers to seek out naira, thereby
driving its appreciation due to increased demand and scarcity,” Nwoko said.
“Moreover, the foreign reserve policy warrants reassessment.
“The practice of maintaining reserves in foreign
jurisdictions, termed ‘foreign reserves’, is not only objectionable but also
counterproductive to Nigeria’s economic sovereignty.
“Unlike other nations like the United States, Britain,
France, and Japan, which hold their reserves domestically, Nigeria’s adherence
to this practice raises questions about its colonial legacy.
“If our early indigenous leaders acquiesced to this approach
due to colonial influence, why should we perpetuate it? The primary rationale
often cited to justify foreign reserves is trade balance maintenance.”
This argument, according to Nwoko, lacks merit when
considering the limited number of traders involved in importing goods into
Nigeria, which constitutes a negligible fraction of the nation’s population.
“Therefore, the notion that foreign reserves are
indispensable for trade balance equilibrium falls short upon scrutiny”, he
said.
The senator further said there is a need to acknowledge that
the recent appreciation of the naira is not solely attributable to the CBN’s
new measures.
“Rather, it can be
attributed to the decline in refined oil imports following the production and
distribution of refined petroleum from the local refinery – the Dangote
refinery,” he said.
“Now envisage if other heavily consumed products were
locally produced instead of imported. The success would be monumental and
conspicuous.”
Nigeria’s local currency had appreciated to N1,100 on April
15, and suddenly began to depreciate, hitting N1,320 per dollar at the parallel
section of the foreign exchange (FX) market on April 26.
