AS global oil prices continues to nosedive with the attendant effects of glut in the crude oil market, experts have called on the Federal Government to implement policies that would save Naira, the country’s currency in order for it to remain afloat.
Prof. Akpan Ekpo, Director General, West African Institute for Financial and Economic Management (WAIFEM) in a chat with The Nation noted that the government should move fast with implementation of policies that will curb currency crises.
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Ekpo stated that with the coronavirus pandemic ravaging the world, more pressure is mounting on the naira, adding that inflation has already set in.
“To save the naira, the government should make cutting down of the country’s debt servicing allocation which they failed to reduce. They should cut it and go for renegotiation with the creditors on how to pay the debt. They will give us some concession and we may negotiate for more years to pay. They can tell us, let me give you one year to pay your debt because in our budget, the debt servicing is too high, not even the principal yet, it is too high.”
In his own submission, Dr. Muda Yusuf, the Director General of Lagos Chamber of Commerce and Industry (LCCI), said that the only way to reduce exchange rate volatility was to diversify the economy in a sustainable way, saying that three critical factors including quality of infrastructure, policy as well as monetary policies are crucial to get the key parameters right.
“The monetary policy for instance should be designed to drive domestic investment through a moderation of the monetary tightening stance of the CBN. This is needed to moderate interest rate in the economy. It is difficult to drive domestic investment at current levels of interest rate which is well over 25% for most economic players. The economy needs investment, especially domestic direct investment to drive diversification. Happily, this is beginning to change with the recent policy measures introduced by the CBN and the various interventions in the development finance space,” Yusuf stressed.
According to the former Director of Budget and Planning, Central Bank of Nigeria, Dr. Titus Okunronmu, diversification of the economy away from oil is the only way to save the country’s currency, maintaining that the naira will continue to be vulnerable unless that is done.
Okunronmu said, “There is poor management of Nigerian economy, you can quote me, we have crude oil, we go and sell crude oil and we buy more than 50 bye products of the crude oil. Are we helping our employment? Are we helping our external reserves? This is because they can have that money to share, they are not helping the economy, yet we are crying for development. No part of this nation that you can’t get something to grow and feed the whole world. We have cotton in the North, guava from the south, cocoa in the west and a lot of others. God has so blessed us, our eyes will open when there is no more crude oil or the price of crude oil falls down to the ground.”
Source: The Nation