The Nigeria Employers’ Consultative Association (NECA) says improved foreign exchange (FOREX) earnings and crude oil production are critical for Nigeria’s economic recovery.
NECA also decried the wrong channelisation of FOREX over the years by the government, saying it has continued to hurt businesses.
Adewale-Smatt Oyerinde, the director-general of NECA in a statement on Wednesday, said business working capital, production, capacity utilisation, investment, sales, had contracted significantly, while firms were forced to downsize.
Oyerinde was reacting to the unification of exchange rate policy, which according to him, has now progressively become undesirable.
“The unification of exchange rate policy was supposed to bring into convergence the exchange rates at the official forex market and the parallel market windows.
“While the official exchange rate stood at about N781.64/US, the parallel market is around N900/US$ as noted by the Central Bank of Nigeria (CBN).
“The differential of which shows a premium of about 21 percent between the two windows,” he said.
The DG, who described the challenges as ‘grey trajectory’, said that it portends tragedy for the economy if not quickly addressed.
“Consequently, a more stringent action that will significantly reduce the influence of economic saboteurs in the FOREX value chain must be implemented.
“We believe that if the parallel market is not legal, then it is illegal and should be treated as such,” he said.
Oyerinde said that in order to reduce the pressure of FOREX and other economic challenges associated with it, government, as a matter of urgency, needs to ramp up the production of crude oil.
According to him, the production should at least, 1.8 million barrels per day OPEC quota for the country.
“Also, the government should pursue and eliminate crude oil theft; resume domestic refining to save FOREX for other productive uses and be fiscally disciplined in terms of dollar dealings.
“These measures, will no doubt, avail more forex to CBN for onward intervention in the official forex market, which will enable businesses to source forex to sustain business activities,” he said.