Chairman, Zinox Group, Leo Stan Ekeh has added his opinion to the on-going debate over whether or not the federal government should devalue the naira. He noted that the prevailing circumstances in the nation’s fiscal and monetary framework aligned to developments in the oil market makes devaluation a needless venture at this time.
Despite all the pressures on the CBN Governor from both local and international investors, the monetary policy committee has refused to devalue the naira. Analysts believe there is only one reason for this; President Buhari and based on that, the CBN Governor dares not rock the boat. The president has also stood his grounds against devaluation and has remained consistent in his rhetoric since he became president.
He Spoke at a reception organized in honour of his 60th birthday by a select group of ICT Media entrepreneurs in Lagos, Ekeh noted that it was too late to devalue the naira as the move will only serve to further impoverish the masses and plunge the country into a state of hyper-inflation.
“What do you think would happen to already stretched wage earners? Would their salaries be linked to rate of inflation, as is the standard globally? As I speak a lot of states cannot pay the minimum monthly salary.
“If devaluation happened mid-last year it would have made sense and encouraged in-flows from investors but devaluing now would compound our already difficult situation and investors will only wait in anticipation of a further devaluation. It will rubbish our currency forever and strengthen the purchasing power of our trading partners,” he said.
Ekeh, also claimed that Zinox has been one of the casualties of the current forex scarcity with increasing difficulty to meet overseas business obligations, believes Nigerians and Nigerian corporates have reasonably adjusted to the realities of the hard times with pains as most people are now prioritizing critical needs which should be the case most times. In his view, the dire situation has most importantly impacted common sense, which is not too common in many Nigerians.
“It’s too late to devalue the naira at this point in time. I can see reason behind the refusal of the President to consider devaluation as it is a move that will certainly erode the buying power of the middle class and push millions of Nigeria already living below the poverty line into abject penury,” surmised Ekeh, who is also a renowned Third World Economist.
“The country is hugely dependent on imports as it were and with the status quo ante, any attempt to devalue the currency will only usher in inflation and leave the country at the mercy of the vested interests in the global economic set-up who have been voluble in their calls for devaluation.”
Instead of devaluing the currency, Ekeh advised the government to explore other options, which will shore up the value of the naira and make the country less dependent on imports as it used to be in the past.
“We should rather focus our collective energies on workable ideas and a sound framework on which to base the diversification of our present mono-economy to re-ignite the country’s hitherto-forgotten status as a continental exporter.
“This is the time to refurbish our school system and save from remittance of fees for the millions of Nigerians who do not have option than to school abroad. This is the time to create knowledge incubators around the country, which does not cost much to empower Nigerians to create digital wealth, which has near zero-incubation period. It is the time for us develop industrial clusters in major productive zones to supply the needs of Nigeria and reduce importation,” he posited.
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