End forex volatility, experts tell Tinubu

Capital Market experts have urged President Bola Tinubu to end illiquidity in the foreign exchange market to shore up the value of the naira.

Speaking under the aegis of the Association of Capital Market Academics of Nigeria, ACMAN, they called on the Central Bank of Nigeria, CBN, to revisit the currency swap deal with China to ease payments for imports.

The President of ACMAN, Professor Uche Uwaleke said in Abuja, yesterday that diversification of the economy must be a priority for the government.

Prof. Uwaleke said the group was concerned that several policies adopted by the government have not eased the pressure on the local currency.

“ACMAN is concerned that the forex market has remained illiquid and volatility in exchange rates has persisted despite the naira float policy that followed the unification of exchange rates. To make matters worse, the parallel premium has continued to widen seemingly defeating one of the objectives of the naira float.

“In view of the continued huge chunk of imports from China, we are of the view that the CBN should revisit the currency swap arrangement with China to a scale that significantly reduces the dependence on US dollars for imports from China.

“On the supply side, a lasting solution remains, embarking on deliberate efforts to diversify the export base. In the meantime, the government should give support to the CBN in the implementation of the RT 200 programme especially in relation to port reforms while it works on the ease of doing business to pave the way for increased foreign investments”.

While commending the President Tinubu administration for seeing the capital market as a tool to grow the economy, he called for the privatisation of government owned enterprises through the capital market.

He said: “We believe that unlocking value in dead assets is one way to improve the country’s fiscal liquidity. We encourage the new administration to speed up the process of privatizing government enterprises, including the NNPCL, not by selling to a few individuals or companies but through the capital market for transparency and inclusiveness as well as explore asset securitization as a means of financing developmental projects”.