*Exchange rate adjustment necessary-LCCI
25 October 2015, Lagos – The Central Bank of Nigeria, CBN, yesterday dismissed the call for further devaluation by the Emir of Kano, and immediate past Governor of the bank, Mallam Muhammad Sanusi II, saying there would be no further devaluation of the naira.
Sanusi on Friday had faulted the decision of the CBN and the federal government not to further devalue the naira, and also to retain fuel subsidy.
He said, “it is wrong to continue with the fuel subsidy. It is wrong to continue to pretend that you can keep the naira at a certain level, when the price of oil is falling, without depleting your reserves. You have to make a choice.”
But CBN Deputy Governor, Corporate Services Directorate, Mr. Adebayo Adelabu, yesterday, while addressing journalists in Lagos, at the sidelines of the Investiture of the Chartered Institute of Bankers of Nigeria (CIBN), responded to Sanusi’s comment saying, “We are all aware of the CBN’s official position on this, that there will not be any further devaluation of the naira, and this has been communicated.”
“We have made the official position known to the public. There could be comments from various quarters of the economy but we have made our official position known”, he said.
CIBN backs CBN
The position of the CBN was also supported by the Chartered Institute of Bankers of Nigeria (CIBN). Commenting on the calls for further devaluation of the naira, CIBN President, Otunba Adebola Osibogun, said, “The CBN itself is a member of the institute; off course they consult with us, we work together, even though they take the decision, so whatever the CBN decides, the institute always support.”
LCCI backs Sanusi
But the Lagos Chamber of Commerce and Industry, supported Sanusi’s position, saying there is need to adjust the exchange rate in line with current realities.
In a telephone interview with Vanguard, Director-General of LCCI, Mr. Muda Yusuf, said, “We have to situate our policies within the context of current realities.
The reality for now is that the current exchange rate policy is not sustainable. That is why we have all the crises we have been having in the foreign exchange market.
“I think it is a good advice that we should adjust, I won’t call it devaluation, adjustment of the exchange rate in line with current realities.
That will make it easier to manage the current crises that we have. The current approach of the CBN is even creating more problems, than it is even solving. I don’t even believe that is the way we should go”.
Diversifying the economy a must-CBN
Speaking on the theme of the CIBN Investiture, “Diversifying the Revenue base of Nigeria economy, the CBN Deputy Governor, Adelabu said though Nigeria missed the opportunity to diversify the economy when the crude oil prices where above $100 per barrel, doing so has become a must in view of the decline in crude oil prices and revenue.
He said, “The dwindling oil prices, reduction in volume of crude oil production are affecting us, with revenue nose diving, because we relied so much on crude oil. We lost the opportunity to diversify between 2009 and 2014 because we had relative stability in exchange rate, and oil prices went up as high as $110.
“We should have diversified in the period of boom. Now we don’t need anybody to teach us that we have to look at other areas of revenue. This is a challenge to everybody especially to the banking industry.
“Banks need to look at other sectors in terms of lending. Fortunately we are blessed with almost every resource on the earth.
Agriculture is a sector we must focus on. We have lots and lots of solid mineral” resources; and we should focus on developing them. Most importantly, we have to patronize local products.
Every Nigerian should de-emphasize consumption of imported goods, because by doing so, we are helping other countries. We should all patronize locally made goods.”
*Bababjide Komolafe – Vanguard