Abuja, Feb. 5, 2024: A Financial Expert, Dr Chijioke Ekechukwu, says the Naira can be strengthened if the country can earn substantial foreign exchange revenue on a daily basis.
Ekechukwu, an economist and a past president of the Abuja Chamber of Commerce and Industry, on Sunday in Abuja urged the Federal Government to use every possible avenue to increase the country’s export base to earn more forex.
He advised the government to ensure that the country’s crude oil sales meets the Organisation of Petroleum Exporting Countries (OPEC) quota of 1.8 million barrels per day.
He said that the government should ensure that the revenue from crude oil sales comes in on a daily basis through the Central Bank of Nigeria (CBN).
“If we sell our exports on a daily basis, we must get the revenue on a daily basis.
“The revenue must come through the CBN, and the apex bank must receive and distribute such revenue almost immediately.
“But if we have inflow coming in as revenue and the CBN is not seeing it, the NNPC is selling but we do not know where the money is going to, there will be shortage of forex.
“We need a situation where we earn forex on a daily basis and we have excess of it in the market for both the banks and the Bureaux De Change.
“Until we have such a situation and we are able to meet all the demands of importers, the exchange rates will not come down in a hurry,” he said.
According to him, the Federal Government should also initiate a deliberate policy of total curtailing of importation so that what we can not source locally should not be consumed.
He said that such a step would drastically reduce the demand for the dollar and other foreign currencies.
“It is either there will be a deliberate policy of total curtailing of importation so that whatever we can not source locally we do not need, so that the demand for foreign exchange will drop, ” he said.
The expert said that the idea of unifying the dual exchange rates and floating the Naira as done by President Bola Tinubu, without a strong export base, had been counter productive.
He urged the Federal Government to revisit the policy decision.
“Floating the Naira when your balance of trade is heavy on the negative side was ill-advised.
“We were not prepared with enough in our foreign exchange reserves. We did not have enough revenue in foreign exchange to float the Naira.
“If possible, the policy should be reversed so that we can go back to moderating the foreign exchange market, ” he said.
Ekechukwu also advised that payments of fees to foreign universities should be curtailed.
“There should be a deliberate policy to reduce payments to foreign universities, ” he said.
Naira had been on a free fall in past week, losing more than 31 per cent of its value, and exchanging for over N1,500 to the dollar.
The situation informed certain steps by the CBN to actively address issues of foreign currency speculation and hoarding by Nigerian banks.
However, speaking at the recent Nigeria Economic Summit Group (NESG) event , the CBN Governor, Yemi Cardoso said that the Naira was undervalued.
Cardoso promised to work towards real price discovery in the foreign exchange market.
He said that the apex bank planned to implement inflation-taming policies and collaborate with the Federal Ministry of Finance to stabilise the exchange rate and curb inflation.