Ibadan, July 17, 2023: Stakeholders have said unless Nigeria produces more for exportation and attitude towards locally manufactured goods change the crises with the foreign exchange (FX) will persist.
They stated in Ibadan on Monday while speaking on the government policy on FX under the new administration.
Chief Abiola Alli, the Chairman of Public Policy Advocacy, Ibadan Chamber of Commerce and Industry said unification policy of the Federal Government was the right step to take but shouldn’t be the only tool to regulate the market.
According to him, the FX we are regulating is not coming from Nigeria but from other countries because Nigeria as we stand now is not a producing nation because we don’t produce most of the things we consume.
We depend on importation to survive that is not to say that we don’t have a comparative advantage to produce some of the things we import but our attitude to locally made goods is to be blamed.
“Where does the foreign exchange come from it is from the foreign economy; Dollars, Pound Sterling Euros, and others.
The foreign goods we buy from other countries are denominated in Dollars, not Naira; it means you need more Naira to chase a few dollars and that in itself will hike the prices of goods and services.
“We recommended that government should also boost the export to generate foreign exchange from other countries by removing the bottlenecks in the exportation of goods to other countries, encourage those in the exportation business so that we can also earn FX,” he said.
Also, a Bureau-de-Change operator, Mr Audu Jubril said the unification policy has been affecting the undulating prices of the foreign exchange adding that the banks have been selling the FX at prices that soothe them.
He noted that the banks got the FX at the Central Bank rate but were selling it at higher rates due to high demand.
“This has affected the prices of FX at the black market and dollar is sold at N780 per naira and I don’t know what the situation would be like by next week,” Jubril said.
A financial Consultant, Mr Tunji Adepeju said Nigeria has been living with three means of exchange rate for some times now in which some people have taken advantage of the situation to enrich themselves, especially those who had access to the official rate.
He said round-tripping and other sharp practices have continued to increase the FX rate and have a negative impact on the nation’s reserves.
Adepeju noted some sharp practices by commercial banks and individuals which have contributed to the FX problem in the country and commended the Tinubu administration for the unified rate.
“What we now have is that naira against dollars is floating; if I have a dollar and you need naira then we both can determine the rate at which we want to exchange it; you have the investors and export market so to speak. At the end of the day, through the official platform, those buying and selling naira and dollars form an average exchange rate that changes every day.
“It will keep on fluctuating as it is the case of demand and supply but by the time Nigeria starts exporting goods and services we will have more than enough dollars and the demand for it reduces such that manufacturers source their raw materials locally and we have more value addition, the pressure on the dollar will reduce and invariably the exchange rate will go down.
This is the initial period, I believe with time the rate will come down and there is no need to rush as the government policy would eventually work out as planned,” Adepeju said.
He urged Nigerians to mi minimise their demand s for foreign goods and consumes locally made goods.
