The Multidisciplinary Finance Professionals (MFP) Group has asked the government to stop the dollarisation of international transactions and floating of the Nigerian currency as part of strategies to address the devaluation of the currency.
These were contained in the communiquรฉ of the group at the end of the sixth edition of its free lecture series, held virtually on Friday, August 2, on the topic, โNaira Devaluation: Recovery Strategies in a Challenging Economy.โ
Samuel Inikori, the Chief Executive Officer of SPASS Management Consult Limited, who presented a paper on the topic, noted that the primary objective of local currency devaluation is to improve the balance of payment position due to reduced imports and increased exports.
Inikori, who was represented by Chioma Ojukwu, a lecturer with the Department of Accounting, University of Port Harcourt, explained the various ways a countryโs currency can be devalued including external, internal, and competitive devaluation. He added that other ways to devalue a currency also include purposefully printing more money and Nigeriaโs Ways and Means.
He stated that the benefits of devaluation are to: โBoost exports, shrink imports, reduce sovereign debt burdens, encourage local production, increase foreign investment, improve balance of payments, boost government revenue, improve economic growth, stimulate tourism and improve investor confidence.โ
On the demerits of naira devaluation, Inikori noted that โNaira devaluation fuels inflation in import-dependent countries. Local markets tend to be flooded with both standard and sub-standard goods as it turns like a dumping ground and this cripples the local industries and in turn, fuels the wave of crimes.โ
Speaking on strategies of recovery in an economy such as Nigeriaโs, Inikori said: โReduce lending rates to as low as five percent per annum and other conditionalities of borrowing to make funds accessible to MSMEs, SMEs, and large businesses; implement price control. Prices of essential products should be controlled; re-introduction of subsidy: The Federal Government of Nigeria should critically consider the re-introduction of subsidies in the power and energy, agriculture, and transportation sectors.
โGovernment should not continue to allow market forces to determine the value of the naira, rather, government should determine what it wants the value of the currency to be so that people can plan, else, the currency volatility could be unending; deliberate and conscious de-emphasis of the US Dollar as an international unit of exchange. Nigeria should go into individualised exchange rate agreements with major trading partner-nations and stop dollarizing all their international transactions; going back to primary agriculture and the processing of agroproducts locally for more value creation.
โBanning of the importation of locally produced goods and various canned food items, clothings, footwear, etc. Importation could be restricted to raw material, machinery, and human capital development-related imports. This will encourage local manufacturers and create more employment; creating a conducive business environment. Nigeria is blessed with several other mineral deposits such as gold, tin, ore, columbite, tantalite, bitumen, etc., hence, the need for diversification besides crude oil.
โEven distribution of infrastructures across the country; revive all our refineries and commence refining of petroleum products; the steel industry is a major gateway to heavy duty industrialisation and industrialisation is the key to economic stability, hence, the need to revive our steel industry; Nigeria, African and other developing countries are advised to develop country and region-specific and personalised economic policies as the World Bank and IMF are not designed to suite economies of developing economies.โ
In his opening remark, Dr Prince Oyebade Oyedepo, the MFP Group leader and President/CEO, MFP Global Services, stated that the President Bola Tinubu administration has witnessed lots of policy changes and that the programme is for professionals to gather and champion ways forward in the implementation of some of the government policies.
Chairman of session and Head of Department of Accounting, Federal University, Lokoja Professor Emmanuel E. Onoja, in his speech, emphasised that the topic is timely and for the good of President Tinubuโs administration and wishes that the presidency aligns with the points enunciated.
The lecture series had over 48 participants including Dr (Mrs) Temitope Babajide, the immediate past Chairman of Ibadan and District Society of Institute of Chartered Accountants of Nigeria (ICAN); Mrs Eunice Nwaedo Peter, Stalwart, MFP Group Nigeria, Mrs Tolu Olatoyan of Precious Cornerstone University, Ibadan; Dr Mike Alatise, the Bursar of Kola Daisi University; Chief Mrs Omokemi Oladipo, Managing Consultant, Salvage Consult; Mrs Folasade Idowu; some current and past chairmen of the Districts of ICAN and current and past Chairpersons of Society of Women Accountants of Nigeria (SWAN), captains of industries, amongst others.