Stakeholders anchor growth on higher productivity

Only the enhancement of Nigeria’s productive base and a tempering of the appetite for foreign goods can guarantee sustainable development, stakeholders say.

The stakeholders, including Adams Oshiomhole, governor of Edo State, Bismarck Rewane, chief executive of Financial Derivatives Company, Moses Tule, director, Monetary Policy Department, Central Bank of Nigeria, (CBN), Issa Aremu,Deputy National President, Nigeria Labour Congress (NLC), Muda Yusuf, Director General, Lagos Chamber of Commerce and Industry (LCCI) and Frank Aigbogun, Publisher, BusinessDay, were unanimous in their submissions at the Cable Colloquium in Lagos yesterday, that efforts should focus on increasing productivity, so as attract foreign exchange for the ailing economy.

They also said devaluing the naira without fixing the necessary infrastructure would be meaningless, as the CBN could only manage foreign exchange available in the economy.They further observed that Nigerians need to be orientated to consume locally produced goods, as a way of supporting the Federal Government’s drive to diversify the economy.

In a note last night, Rewane said, “Nigerians are perplexed at the endless slide of their currency, which is now trading at N325/$, the lowest point ever. This is happening even when the oil price is up at $31pb. The debate as to whether to devalue the naira is not the real issue. The discourse should be whether we need an exchange rate policy or not. The absence of a policy is a recipe for economic anarchy and a race to the bottom.”

Rewane believes that, “The CBN can manage what it has.” He further noted that only higher productivity can increase monetary policy efforts at stabilising the exchange rate.

He advised on managed floating exchange rates with national interest, adding that the CBN is working to ensure that at the end of the turbulence, there will be stability.

Similarly, Bloomberg quoted Aminu Gwadabe, president of Lagos-based Association of Bureau de Change Operators (BDC) as saying that  as a result of the depreciation, “A lot of people that have obligations abroad are looking everywhere for dollars.”

Tule advised government to help push for a change in investment climate through the provision of an enabling enviroment.

Worried by Nigeria’s low score on the ease of doing business index, in  which it ranks at over 100 position in the committee of nations, Tule said, “We need a voice that will push for ease of investment climate”.

Oshiomhole insisted that Nigeria would continue to defend the naira and that the CBN should put speculators away and come up with policies that would curtail spending on imported goods.

“Let us support efforts of the CBN and the President towards the local currency”, Oshiomhole said, while advocating for increase in the number of items restricted from accessing foreign exchange.

“If devaluation was the answer, it should have worked after the past devaluations. “The real question is, will devaluation curb our appetite for foreign goods? Oshiomhole pointed out. “If we don’t curb our import and realign our consumption, we will run out of foreign reserves within one year,” he said.

Vincent Nwanne, who represented Muda Lawal of the Lagos Chamber of Commerce and Industry, said: “We feel very strongly that the CBN has the right to ensure stability in the economy. But what we do not like is the uncertainty. What we do not like is the trial and  error and reversals.

“For us, we see the 41 items as 728 lines. In terms of palm oil, we consume 1.8 million tones per year, but only produce 600,000 tonnes. We have deficit of 1.2 million tones. So we need a time lag to meet the local demand before the policy.”

Aremu also canvassed for local production that would bring about increased economic activity and improve the wellbeing of the citizens.

CBN stopped selling foreign exchange to money-changers last month, the latest in a series of controls aimed at supporting the naira at a fixed peg of 197-199 per dollar at the official interbank market since March last year, after it fell to a record 206.32 in February amid plunging oil prices.

According to Bloomberg, Africa’s biggest oil producer has restricted foreign currency trading at banks, causing a shortage of dollars in the economy that imports most of its manufactured goods and sending the unofficial rate soaring.

Crude sales account for about two-thirds of government revenue and about 90 percent of the nation’s foreign currency earnings.

“About $10 million is sold daily in the official market, aside from the Central Bank sales, which is too low to meet demand,” Razia Khan, Standard Chartered Plc’s chief Africa economist, said in a Feb. 8 report.

ODINAKA ANUDU, HOPE MOSES-ASHIKE, MABEL DIMMA & CHIGOZIE EGWUATU