BusinessFinance Experts Identify Reasons For Devalued Naira

Finance Experts Identify Reasons For Devalued Naira

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September 29, (THEWILL) – An Economist, Tope Fasua, has identified corruption, inefficiency and low productivity as part of factors responsible for the depreciation of the naira.

On his part, a financial expert and former President of the Chartered Institute of Bankers of Nigeria (CIBN), Okechukwu Unegbu, said the continuous depreciation of the naira implied that steps so far taken by the CBN to strengthen the currency had not worked.

Fasua, who is the Chief Executive Officer of Global Analytics Consulting Limited, made this known in a chat with newsmen on Wednesday.

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He noted that it was worrisome that despite measures taken by the Central Bank of Nigeria (CBN) to strengthen the naira, the currency kept depreciating.

Fasua said: “What is happening to the naira is that all of us are having to pay for sins of the past, sins of corruption, inefficiency, low productivity. The fact is that Nigerians are not patriotic ”

He cited the Central Bank of Nigeria (CBN) policy which stopped the sale of forex to about 10,000 odd Bureaux De Change (BDC).

Fasua lamented that too many people and firms had BDC licences.

He said: “This particular one is a speculative attack ignited by the policy of the CBN to stop the sale of forex to about 10,000-odd BDCs. Here, everyone has a BDC licence. Some have multiple licences.

“That itself is a world record number when compared to places like the United Kingdom where they have 145 BDCs, United Arab Emirates 130 and New York 40. We should support CBN to stop the idea of people carrying dollars around as if it is a mark of prosperity.”

The expert stressed that the CBN had the right to regulate forex sales and called for adequate supply for official and legitimate transactions.

Fasua also cautioned Nigerians against placing a premium on what happens at the Black Market.

The Economist urged them to encourage the CBN to expand the transactions it can grant eligibility.

He said: “If CBN is able to supply forex for official and legal transactions, we should not bother ourselves with what happens at the Black Market. We need to be careful how much premium we place on what happens at the Black Market. We should also encourage CBN to expand the transactions it can grant eligibility.

“The more of the import transactions and the visible trade transactions the CBN can meet, the better for the naira.”

Unegbu, who fought the dollarisation of international exchange, suggested that importers from China be allowed to exchange naira for yuan, the Chinese currency.

He suggested: “One of the things that would have helped is having the naira exchange for the Chinese yuan for imports from China. We do not need to pay for goods from China in dollars.

“With N500, one can get a square meal in Nigeria. But with one dollar, you cannot get anything in America. This is an indication that the naira has been abused and undervalued. The CBN will need to come up with innovative policies to strengthen the naira.”

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