Devaluation is destructive to the economy, says Rewane

Bismarck Rewane, a renowned economist, has opposed the devaluation of the Nigerian currency, saying such move could destroy the economy.

Speaking at the Nigerian Economic Outlook held at the Eko Hotel and Suites in Victoria Island, Lagos, on Friday, Rewane said: “nobody who lives in an economy will want to sabotage the economy”.

“Devaluation is destructive to our economy, if devaluation is destructive, the revaluation will be constructive.”

“2015 was a rough year, 2016 is going to be a tough year, Nigerian economy is integrated in the global economy.

“If anybody told me oil will drop by $50, I will say no way. But here we are in 2016 and it has dropped by $25.

“The exchange rate misalignment has to be corrected. One thing that is going to be clear in 2016 is lack of leadership, the difference between success and failure is going to be leadership.”

On his part, Akinwunmi Ambode, governor of Lagos state, said the current economic crisis was not peculiar to the country but a global problem.

Represented by Akinyemi Asade, his commissioner for economic planning and budget, the governor lamented the sharp decline in global oil prices.

“The fact however, is that contrary to the opinion of many, the current crisis is not a Nigerian phenomenon, all the developing countries whose growth in the last decade was underpinned by commodity are going through the same crisis, exchange rate depreciation, rising unemployment rate,” he said.

“For a viral economy the exchange rate must be allowed to respond to other micro economic changes in the economy as attempt to manage the exchange rate create further distortion in the system, it is aching to solving one problem and in the process creating multiple others.

“Fortunately for the first time in many years, we hardly have the government in the center that is ready to convert the fiscal failures of the past.”

He also expressed support for the call on the Central Bank to work out a strategy to determine the exchange rate on a long term basis.

“I have listened to various calls on the Central Bank of Nigeria to be very clear in its long term strategy for market determined exchange rate policy and I agree those calls should be addressed as soon as possible,” he said.

“I endorse some of the current policy even tackling the excesses of those that are sabotaging the economy.

“However, current policies must be time bound and give way for a more sustainable exchange rate policy that will give confidence to the system.

“The most important lessons learnt from the fallen oil prices is the need to diversify our economy and look inwards, I commend the federal government.”

Ambode said his administration would work hand-in-hand with the private sector to tackle unemployment.

“There is a limit to the employment government can create, what we can do is to ensure the environment is conducive for private investors,” he said.

“We’ve also done the employment trust fund, it is going to ensure that the young entrepreneurs will have access to credit.”

Also speaking at the programme, Ernest Ebi, chairman of the network business club said that the vision of the programme is to “show our members the direction the economy will be heading.”

“The main objective is to see the windows of opportunities, what is happening today is not peculiar to Nigeria, it is a global issue.”