Do not go the shut cut to stabilising the naira, Ned Nwoko advises FG, CBN

Sen. Ned Nwoko has recommended against actions that could force the Naira to appreciate in value relative to other currencies, both to the Federal Government and the Central Bank of Nigeria (CBN).

The counsel was provided in a statement that Delta North representative Nwoko personally signed in Abuja on Saturday.

He told them there was no shortcut to success and that they should focus on solving the primary problems causing the Naira to depreciate.

He noted that the country’s currency’s strength and pursuit of economic freedom were continuous endeavours.

Nwoko added that it was crucial to constantly review previously put into effect policies and take new ones into consideration.

In addition, he emphasised that Nigeria must increase Naira demand, saying that a sovereign nation’s currency is the foundation of international cooperation and respect.

He asserts that since his country exports commodities, including crude oil, it is essential that all transactions involving these goods be made solely in Naira.

“This will incentivise buyers to seek out Naira, thereby driving its appreciation due to increased demand and scarcity.

“Moreover, the foreign reserve policy warrants reassessment. The practice of maintaining reserves in foreign jurisdictions, termed “foreign reserves,” is not only objectionable but also counterproductive to Nigeria’s economic sovereignty.

“Unlike other nations like the United States, Britain, France, and Japan, which hold their reserves domestically, Nigeria’s adherence to this practice raises questions about its colonial legacy.

“If our early indigenous leaders acquiesced to this approach due to colonial influence, why should we perpetuate it? The primary rationale often cited to justify foreign reserves is trade balance maintenance“, Nwoko said.

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According to him, this argument lacks merit when considering the limited number of traders involved in importing goods into Nigeria, which constitutes a negligible fraction of the nation’s population.

“Therefore, the notion that foreign reserves are indispensable for trade balance equilibrium falls short upon scrutiny”, he said.

The lawmaker who is a Solicitor, Supreme Court of England and Wales said there was the need to acknowledge that the recent appreciation of the Naira was not solely attributable to the CBN’s new measures.

“Rather, it can be attributed to the decline in refined oil imports following the production and distribution of refined petroleum from the local refinery – the Dangote refinery.

“Now envisage if other heavily consumed products were locally produced instead of imported. The success would be monumental and conspicuous,” he added.

In January, in a statement, he had preferred crucial measures to be adopted by the federal government CBN to combat dollarisation and stabilise the Naira.

Nwoko said that since the dissemination of that statement, various measures have been implemented to bolster the value of the Naira.

“However, the efficacy of these measures is yet to manifest fully, as the root cause of Naira devaluation remains unaddressed.

“Until we confront the underlying issues head-on, our efforts against dollarisation will be in vain,” he said.

NAN