CIBN, experts lament over flexible exchange rate dynamism
Niyi Olaoye
Financial experts have expressed concerns over the current business dynamics been faced by Nigerians under the prevailing flexible exchange rate in the country.
The experts who met at the breakfast session of the Chartered Institute of Banker of Nigerian (CIBN) over the weekend noted that though, the recent policy had placed a positive impact on the economy by removing distortion, hoarding and speculation in the currency market but could only be enjoyed better if the Central Bank of Nigeria, CBN, would remove its ‘invisible hand’ from the free flow of the market operations.
They said that with the adoption of the flexible exchange rate, the apex bank had promised that the decision would lead to increased in dollar inflow in few days but the reverse has been the case as Nigerians are facing hard time to do business with the directive.
On the other hand, the expert explained that the policy in the short term is hurting the economy because of the dwindling revenue accruing from the sale of crude oil but believed that round-tripping and arbitrage which use to be the order of the day has been reduced drastically.
They also blamed the Federal Government for not creating an enabling atmosphere for the manufacturing sector to thrive in order to increase the nation’s capacity to earn in dollars.
Managing Director/CEO Dove & Brooks group, Dr. Tunji Sohodu, specifically explained that poor Nigerians are the most affected by the Federal Government’s fixed exchange rate regime.
He further noted that a synergy of monetary and fiscal policies directed at infrastructural development and reforms would increase tax compliance and create a favourable environment for the SMEs to thrive.
In his words: “The long term benefits of free float foreign exchange are contingent on efficiency, transparency and proper regulations. It is also expected that foreign investors will re-enter the economy through FDI and provide domestic companies with necessary funding and expertise required to resuscitate business activities.
Mr Uche olowu, 1st vice president of the institute therefore urged the government to apply a robust debt management plan at both the federal and state levels, while following through on capital projects required to drive the economy and attract foreign direct investment (FDI).
He also stressed that the speedy resolution of the Niger Delta militancy and pipeline vandalism was required to boost oil production and foreign exchange revenues.
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