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Experts seek exchange rates convergence

By on March 18, 2016

The Chief Executive Officer, Financial Derivatives Company, Mr. Bismarck Rewane, has expressed displeasure over the wide gap between the official and parallel foreign exchange rates.

To this end, he stressed the need for enactment of policies that would help bring about a convergence of both rate. However, Rewane also called for an adjustment of the official rate to reflect “reality.”

Rewane, who gave the advice in Lagos during a business clinic organised by the Lagos State Chamber of Commerce and Industry (LCCI) tagged: ‘2016 Business outlook Petroleum: Downstream perspective”, noted that clarity and consistency of policies have to be established by Nigeria’s policy makers.
According to him, if policies were not well articulated, the market will continue to publish the economy.
He added: “Today, there is a queue for forex and fuel. If there is a disparity between availability, value and price, then you will have a distortion. The distortion will disappear and I’m confident that the right decisions are been made at this point.

“The federal government is totally determined to ensure that they do the right things, if we don’t do the right thing, the market will publish the economy.
“Until we do the right thing, the market will continue to publish the consumers. Loot recovery is an integral part of the agenda, it is necessary but it is not sufficient enough, the country is suffering anaemic economic activity. Economic activity is almost paralysing, you need to activate the economy.
“The punishment of looters is not about the loot that is lost, it is about sending a signal to serve as a deterrent to those willing to do the same. What is gone is gone, if you recover anything, which is a bonus.”

He said further: “There are two types of corruption – financially certified corruption, this is common with those that are greedy, and there is structurally certified corruption, which happens because the structure fosters that kind of attitude, what we are going to deal with is how to remove those structures because they have breed corrupt tendencies.”
He stated that the economy needs to begin functioning properly, as it requires a consistent plan on how “to convert savings into development, and development into welfare and well-being of the people.”

In her welcome address, the President, LCCI, Dr. Nike Akande noted that the petroleum industry has witnessed several setbacks such as shutdown, vandalisation of pipelines, and recurring scarcity of products, adding that despite the several discussions to reform the sector, little progress has been made.
She further stated that the harsh economic climate has weakened the revenue generation drive of the nation, stating that the sustained decline in global oil prices since 2014, has put the nation in a difficult position and consequently led to various fiscal and economic challenges such as “the drop in foreign earnings, decline in foreign reserves, huge financial bailout for some state government and unstable business environment.”

 

[ThisDay]