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Naira devaluation: Investors proffer alternatives

By on March 20, 2016

Rather than weaken the local currency, which will further harm the already hard-hit economy, investors in the country have advised the Federal Government to look at other options of strengthening the economy.

According to the Chairman of Zinox Group, Leo Stan Ekeh, Naira devaluation will have been most suitable for mid-last year as it would have encouraged in-flows from investors.

He said that any attempt to tamper with the nation’s currency now would particularly impoverish the masses and plunge the country into a state of hyper-inflation.

Instead of bowing to pressure from different corners, the Information Communication Technology entrepreneur advised the government to embark on deliberate and committed investment in key areas that would in turn arouse and sustain growth and independence.

“We should rather focus our collective energies on workable ideas and on a sound framework on which to base the diversification of our present mono-economy and re-ignite the country’s hitherto-forgotten status as a continental exporter.

“This is the time to refurbish our school system and save the nation from remittance of fees for the millions of Nigerians who do not have option than to school abroad. This is the time to create knowledge incubators around the country, which does not cost much, to empower Nigerians to create digital wealth with near zero-incubation period. It is the time for us to develop industrial clusters in major productive zones to supply the needs of Nigeria and reduce importation,” he said.

In the same vein, the Vegetable and Edible Oil Producers Association of Nigeria (VEOPAN), strongly backs the President’s stand not to devalue the Naira, further appealed to the government not to be pushed to shift its position.

The president of the association, Okey Ikoro, noted that considering the option of devaluation would make more businesses to go under, saying 50 per cent of the association’s members had been forced out of business already as a result of the country’s present economic crises.

He said as an alternative, the government should remove every luxury item from the importation list, while importers of such items should source for Forex elsewhere other than the official window.

According to him, “Nigeria is still battling infrastructure deficit and striving to develop its industrial sector. To this effect, devaluation does not add any value to the economy now because most industrialists and manufacturers still import their plants and equipment and all these require using foreign currency, especially the US dollar.”

He stated that Federal Government needed to be consistent with its policies which must be economy-friendly. “The issue of making a policy today and changing it after some months does not encourage investors. If policy is made today, people will start to build on it; but if changed halfway, people who have invested will lose their investments. Such would act as disincentive to industrialists,” he said.

The former Commissioner of Economic Planning and Statistics in Ondo State, Senator Bode Olowoporoku said government should adopt a closed or semi-closed economic system. By this, the ex-commissioner meant that the Federal government should employ all methods at its disposal to restrict imports and encourage exports so as to ensure favourable balance of trade that would in turn enhance productivity and employments.

According to the President of National Association of Nigerian Traders (NANT), Ken Ukaoha government should review the country’s trade policy to discourage importation, instead of devaluing the naira.

“The last trade policy Nigeria had was in 2002, and it expired in 2002. Unfortunately, trade policy of 2012 which is by now redundant is lending support to import because the thrust of the policy is import liberalisation.”

 

[ThisDay]