…Warn Against Return Of Emefiele’s Days

…Say It Could Lead To Hyper Inflation, Higher Cost of Living

LAGOS – Experts have slammed the Cen­tral Bank of Nigeria over specu­lations that it has returned to its former policy of discriminatory FOREX rates which was widely blamed for the arbitrary depreci­ation of the Naira.

The policy was dropped by President Bola Tinubu on as­sumption of office on May 29, 2023, along with the withdrawal of petroleum subsidy and the action was widely applauded by Nigerians.

Chief Ochi Emmanuel Ode, a maritime stakeholder and inter­national businessman, in his re­action to this latest development, stated: “The management regime of forex should be in such a way to favour real sectors geared to­wards production and regenera­tion of the economy.

“The situation where key manufacturing of raw materi­als are left unchecked will lead to higher cost of goods beyond the reach of the masses, because prices go hand in hand, all inclu­sive.

“Government will have more money in Customs revenue, but in the real sense, this will weaken the purchasing power of citizens as a result of hyper-inflation of goods.

“If foreign exchange is seg­mented devoid of corruption and manipulation, it will favour those connected in place of merit, as prescribed by the government.

“The problem today is major because of the unification of FX. It is the duty of the government to segregate the essentials to help regulate the indices that give rise to fair deals. That is world over.”

Dr. Frank Freds Nwosu, Man­agement expert and Managing Director, Business Innovations (WA) Ltd, stated that “The na­tion of Nigeria is right now in the crucible, in relation to its wobbly economy and financial management.”

Dr. Nwosu, Member, Nige­rian Institute of Management (MNIM), stressed: “Several poli­cies seem to be thrown into the experiment to make us float atop the raging waves.

“Who can tell what impact a failure at this point will have on the psyche of our upwardly mo­bile youths and the economical­ly active class, whose sweat and grime are oiling our economic wheels?

“Now, what do you think would be the consequences of CBN’s rumoured discontinua­tion of its FX rates unification in favour of discriminatory rates?

“The average opinion is that they are running away from unification because all efforts so far have not been able to bring down the rate via their unilateral actions, which came with reper­cussions (like foreign reserves de­pletion and offshore dollar loans).

“It, therefore, means that we are going back to the old days of multiple running rates. Gov­ernment may not be concerned with what rates are going on in the black market.

“To those who are not quite conversant with certain econom­ic principles, especially when it comes to financial/fiduciary is­sues, this will finally not create a major economic shift.

“Some pundits opine that the Central Bank of Nigeria (CBN) is just hanging off; that they are tired, and do not deserve to be bothered about.

“In the words of the astute economist, Peter Agbor, ‘Discrim­inatory’ here simply means mul­tiple exchange rates, suggesting that they can sell to Bureaux de Change with a special rate.

“Customs can use another, different rate and the autono­mous foreign exchange market a different one.

“This method will save the for­eign reserves, at least, but rates will not be going up fast.

“This last factor is key. The operational module to get us to this stable status is what every patriotic citizen should bother about.”

Julius Adegunna, a public affairs analyst and media execu­tive, stated: “It is believed that the unification of foreign exchange rates in Nigeria has been respon­sible for the relative stability and appreciation in the value of the Naira in recent times.

“To sustain it may not be only through government fiat and con­trol. What can stabilise Nigerian Naira in the forex market is to boost and enhance our produc­tive capacity as a people.

“What usually destroys gov­ernment programmes and poli­cies are what can be termed as the Nigerian factor. Nigerians like to influence policies that seem not to favour them as a group.

“By adopting discriminatory rates, the CBN may be reverting to Governor Emefiele’s days which may open Nigeria to an­other era of forex manipulation and its consequent corruption.

“I still believe the handlers of the Nigerian economy know what is best for the country in this crucial situation.”

Ambassador Blessing Jo­seph Afang, Nigerian Chapter President, International Human Rights Protection Service, Na­ples, Florida, USA, stated: “The Nigerian economy is facing sig­nificant challenges exacerbated by factors that are both internal and external.”

Ambassador Afang, a lawyer, continued: “Numerous initia­tives and steps have been taken. Policies and decisions by the President Bola Ahmed Tinubu to stabilise the economy and put it on the path of growth are ongoing.

“Despite all efforts put in place, the depreciation of the Naira against major foreign cur­rencies has become a pressing concern.

“The much commented uni­fication of the foreign exchange rate done less than a year ago, seems to have been abandoned by the exchange authorities.

“Last week, the anchor of the single trading window closed at N1339.23$, trading at the Nigeri­an autonomous foreign exchange market (NAFEM)

“The spot rate for import duty transactions with Bench Mark exceeding N1600/$ was adopted by CBN/NCS at some point ig­noring dissent views.

“Sources confided that dis­criminatory rates would upset the market in the coming time as much concern is raised, es­pecially with the international institutions, which commended the pro-market reform.

“If as rumored, there is a relapse to the old practice, the consequences would be that: Changes in the short term float­ing exchange rates would repre­sent disasters, speculating and daily supply and demand of the currency, foreign investors would be discouraged.

“It is a disadvantage in assess­ing our risk tolerance that breeds uncertainties as it fluctuates, it would affect decision making.

“There would be loss of auton­omy as floating rates exchange encourages government or ex­change authorities like the CBN to intervene.

“Although floating rate ex­change encourages autonomous monetary policy, however, they are not suitable for a country like ours, especially now that Nigeria has an unstable economy and in­effective monetary policies.”

Dr Herbert Ekechukwu, an economist cum cleric, stated: “The CBN abandoned FX unifi­cation rate in favour of multiple (discrimination) rate conse­quences.

“Foreign exchange unifica­tion rate simplifies currency transactions by eliminating the need to transverse through var­ious rates and associated impli­cations.

“Businesses can engage in straight forward conversion and transaction at a single market driven rate streamlining their operations.

“What are the advantages of unification of foreign exchange rate? They include: Fewer gov­ernment intervention; improved price discrimination; Enhanced greater foreign exchange sup­ply; higher capital importation; reduced budget deficit; improved investors’ confidence and im­proved sovereign credit.

“What is discriminatory or multiple exchange rates?” he asked. According to him, “It is having differential rates of FX for different purposes, for exam­ple, NAFEX.

“This is CBN’s exchange rate, interbank exchange rate, the rates between commercial banks and the parallel market or black market rate.

“The discriminatory ex­change rate hinders investment and comes with other complex people. Why then should the government abandon a better system to one with a myriad of problems?”