Expert warns against Naira’s devaluation
In a press briefing at the Nigerian Union of Journalist (NUJ) Press Centre, Iyaganku, Ibadan, Aragbada explained that devaluation would amount to a double jeopardy for the nation, as the monolithic status of our economy as evinced by the export of crude oil majorly, already constrained the country to the whims and caprices of the consuming nation.
The economic analyst, who is the Chief Executive Officer of the Fultatet Communications, said that Nigeria as a member of Organization of Petroleum Exporting Countries (OPEC), was restricted by production quota, implying that depreciation would not add a pint of crude oil to the export limit by the cartel.
Added to this limitation, according to Aragbada, was that Nigeria still chronically groans from under – capacity utilization of the refineries, leading to the importation of refined fuel, meaning that the importer might expend higher quantity of local currency to acquire the scarce dollar should there be devaluation, thereby invalidating any expected benefit from global slump in the price of the refined fuel.
Dismissing the parallel market value as a gauge for the strength or weakness of the naira as jejune, Aragbada said that no serious government will abdicate one of its sole responsibilities of ensuring macro – economic stability in the land, to black market sector, where gluttonous demand for foreign currencies could hardly be moderated by the conventional monetary and fiscal policies of the government.
Devaluing the Naira now, he further stressed, would rubbish the 2016 budget as most of the proposed infrastructural development that demand huge foreign components will gulp larger quantum of foreign currencies at greater disadvantage to other sectors.
Calling on the three tiers of governments to restore confidence in foreign investors through the enhancement of security, infrastructure and annihilation of corruption, he admonished Nigerians to demonstrate adequate patriotism through the patronage of locally made goods.
It was embarrassing, he said, that some Ivy League secondary Institutions in Nigeria and five-star hotels still charge foreign currencies for school fees and lodging respectively.
“The time has come for CBN to unmask the masquerades behind the illegal diversion of foreign currencies to the black market through round – tripping and other unholy sources” he maintained.