MAN, LCCI kick against Sanusi’s call for naira devaluation
Industrialists have kicked against the Emir of Kano Muhammadu Sanusi II’s call for Central Bank of Nigeria (CBN) to further devaluate naira.
Speaking to Daily Trust on telephone chart, President ,Manufacturing Association of Nigeria (MAN), Dr. Frank Jacobs said further devaluation of naira is a threat to Nigerian economy.
According to him, manufacturers are finding it difficult to cope with CBN decision on foreign exchange ban on 41 items.
“CBN has done it before and there is nothing to show for it, even if it devaluates it by N1,000 to $1 the situation will not change. It will affect foreign direct investment into the country if we devaluate further.”
Jacobs noted that further devaluation of naira would lead to massive layoff by manufacturers because Nigeria business relies on dollar, saying “we are not export country, even the products we are producing locally we will still need to source for raw materials from abroad”, he said.
In his own the Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf ,CBN’s approach to the management of the foreign exchange market has created more problems for the economy than it has solved.
“It has resulted in transparency issues in foreign exchange allocation; round tripping because of the huge disparity in rates; liquidity problem as it is very difficult to access foreign exchange even for items that are valid for foreign exchange.
He further said that the absence of level playing field and uncertainty as the foreign exchange market has become very unpredictable. The effects of all these have been adverse and profound on business”, he said.
Yusuf affirmed that the CBN has fixed an exchange rate which it lacks the capacity to support in terms of supply.
According to him, “Its policies also represent a major obstruction to inflow of autonomous foreign exchange. It is a very unusual model. The CBN got itself needlessly entangled in a complex web of trade policy issues which have caused varying degrees of dislocations for investors in the economy.”
He urged CBN to return to status quo and focus on the creation of a foreign exchange market that is efficient, transparent, predictable and market driven.
The apex bank should thereafter collaborate with other economic ministries like finance, trade and investment, planning commission and the Nigerian Customs Service to articulate fiscal policy measures to fix sectoral, productivity and competitiveness issues in the economy, he said.
Also commenting on the statement, a financial analyst and Managing Partner, Catog Consulting, Mr. Matthew Ogagavworia said there is no basis for CBN to devaluate naira.
He said if the decision of former CBN governor is applied, companies’ capacity to produce would shrink.
Any attempt to devaluate naira will worsen Nigeria economy, saying cost of leaving will be high.
Emir of Kano, Muhammadu Sanusi II