04 October 2016, Abuja – An European Union official, Fillippo Amato, has advised the Federal Government to devalue the Naira as part of measures to tackle the economic recession.
Amato, Counsellor, Head of Trade and Economics Section of EU, on Monday explained that recession could not be addressed with traditional development tools.
He said the recession was a recent development which was due to a number of factors, including the fall in oil prices and resurgence of militancy in the Niger Delta.
He said, “To come out of recession, the country has to take brave decisions, regardless of how unpopular they may be such as fully and effectively devaluing the Naira.
“Devaluing the Naira is a measure, which will finally reassure investors and attract new capitals to the country.
“At the same time, it will further reduce imports, thereby removing artificial forex restrictions, and removing any potential waste of scarce resources such as the fuel subsidy.
“Improving security (in the Northeast and Niger-delta) and ease of doing business are also key factors on which the government must urgently work to re-launch the economy.”
Amato said that EU had been at the forefront of aid for trade support activities in Nigeria and ECOWAS.
He said the most important programme the EU was implementing in Nigeria with its partners – GIZ, DFID/Adam Smith International and UNIDO – was the Nigeria competitiveness Support Programme.
He said, “The programme aims at improving the quality of Nigeria products to comply with international standards.
“The programme is providing capacity building to several Ministries, Departments and Agencies such as Ministry of Agriculture, Standards Organisation of Nigeria, Consumer Protection Council, Nigerian Customs Services and NADFAC.
“We support the trade institutions in the formulation and implementation of a sound trade policy (support to the Federal Minister of Industry, Trade & Investment, and Nigerian Customs Service).
“This is to improve the business environment, with pilot projects in Kano and Kaduna to improve the procedures for obtaining land titles, and business licences.”
He said Nigeria also needed to take advantage of the devaluation of its currency by diversifying its sources of foreign exchange revenue and this mainly through boosting its non-oil exports.