At The Cable Colloquium in Lagos, Thursday, the governor of Nigeria’s Edo State, Adams Oshiomhole, defended the federal government’s refusal to devalue the naira.
While delivering a keynote address at the maiden edition of The Cable Colloquium, Oshiomhole said that the government’s position was to put speculators out of business.
A history of devaluation of the nation’s currency since the Structural Adjustment Programme (SAP) has not benefitted the economy in any way, he said at the colloquium entitled “The Naira on Trial: To Devalue or Not?”
“The first time the concept of devaluation was introduced to us by the International Monetary Fund (IMF), it generated a national debate.
“Chief Olu Falae lectured us about the beauty of devaluation: When you devalue, the price of imported goods will go up, the capacity to consume will drop, and total outflow of forex will be less. Nigerian goods will become cheaper, importation will be less and exportation will be more. This will lead to more foreign exchange and will shore up our foreign reserves.’’
The governor noted, however, that devaluation had never translated to an approximate increase in exported goods because of “Nigerians’ appetite for foreign or imported goods’’.
He argued that available statistics from the Central Bank of Nigeria (CBN) showed that “the thesis that if we devalue we will export more cannot be supported.
“The real critical question is: will devaluation curb our appetite for imported goods? I am unable to find gains in devaluation,’’ the governor said.
He said that currency speculators were the ones manipulating the naira, and exerting pressures on the CBN to devalue it for their selfish gains.
He explained that the nation was dealing with pure speculations and assumptions on the nation’s currency because a few profit from such manipulations of the exchange rate.
“Some people are speculating on the naira, just manipulating the naira for their selfish ends. This is how a section of the business community makes their money,’’ Oshiomhole said.
The former labour leader said that the Nigerian worker had been trapped as a result of the actions of currency manipulators.
He called on well-meaning Nigerians to support the forex policy of the CBN and the stand by the Federal Government not to devalue the nation’s currency.
Earlier, we reported:
Edo State governor Adams Oshiomhole will deliver the keynote address at the inaugural TheCable Colloquium holding on Thursday, February 11, 2016, at the Civic Centre, Victoria Island, Lagos.
The two-hour policy dialogue on the exchange rate will be broadcast live on Channels TV.
A panel to discuss the topic “The Naira on Trial: To Devalue or Not?” is made up of Bismarck Rewane, CEO of Financial Derivatives; Issa Aremu, deputy national president of the Nigeria Labour Congress (NLC); Moses Tule, director, CBN Monetary Policy Department; and Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry.
The discussion will be moderated by Frank Aigbogun, founder and CEO, BusinessDay.
Simon Kolawole, the founder and CEO of Cable Newspaper Limited, said in a statement that the aim of the colloquium is to offer Nigerians a better understanding of the challenges facing the country and allow a decent debate on the way forward.