Senator representing Delta North Senatorial District, Ned Nwoko, has advised the Federal Government and the Central Bank of Nigeria against artificially manipulating the Naira’s value against other currencies.
According to the News Agency of Nigeria, in a statement he personally signed in Abuja, Nwoko emphasized the importance of addressing the root causes of the Naira’s depreciation instead of seeking quick fixes.
He highlighted that economic freedom and a strong national currency are ongoing pursuits, requiring a continuous review of past policies and consideration of new ones.
Nwoko stressed that a nation’s currency value is fundamental for garnering respect and fostering collaboration among nations, suggesting that Nigeria should boost Naira demand by conducting all transactions for its globally exported crude oil and other commodities exclusively in Naira.
“This will incentivise buyers to seek out Naira, thereby driving its appreciation due to increased demand and scarcity.
“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,” Nwoko said.
The lawmaker further argued that the idea of stimulating Naira demand by conducting transactions for globally exported commodities exclusively in Naira lacks merit.
He pointed out that this approach only involves a limited number of traders who import goods into Nigeria, which represents 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.
Nwoko, who is a Solicitor, Supreme Court of England and Wales, identified the need to acknowledge that the recent appreciation of the Naira was 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.
“Now envisage if other heavily consumed products were locally produced instead of imported. The success would be monumental and conspicuous,” he added.
In January, Senator Ned Nwoko had proposed essential measures for the Federal Government and the Central Bank of Nigeria (CBN) to adopt in combating dollarization and stabilizing the Naira. He noted that following the dissemination of that statement, several measures have been implemented to strengthen the Naira’s value.
“However, the efficacy of these measures is yet to manifest fully, as the root cause of Naira devaluation remains unaddressed.
“Until we confront the underlying issues head-on, our efforts against dollarisation will be in vain,” he said.
