‘No shortcut to success’ — Ned Nwoko asks CBN to tackle issues causing naira depreciation

Ned Nwoko, senator representing Delta north, has advised the federal government and the Central Bank of Nigeria (CBN) against measures capable of “artificially” forcing the naira to gain value against other currencies.

Nwoko spoke in a statement in Abuja on Saturday, according to NAN.

He told the CBN to “concentrate on tackling the main issues responsible for the naira depreciation”, adding that “there is no short-cut to success”.

The politician said the quest for economic freedom and the strength of the nation’s currency is an ongoing journey.

Nwoko also said the continuous revisit to previously implemented policies and considerations of new ones is imperative.

He said the value of a sovereign nation’s currency is the cornerstone of respect and collaboration among nations, reiterating that Nigeria must stimulate naira demand.

The businessman said as a nation that exports crude oil and other commodities globally, “it is imperative that all transactions on these items be conducted exclusively in naira”.

“This will incentivise buyers to seek out naira, thereby driving its appreciation due to increased demand and scarcity,” Nwoko said.

“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.”

This argument, according to Nwoko, 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 senator further said there is a need to acknowledge that the recent appreciation of the naira is 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,” he said.

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

Nigeria’s local currency had appreciated to N1,100 on April 15, and suddenly began to depreciate, hitting N1,320 per dollar at the parallel section of the foreign exchange (FX) market on April 26.