By Omodele Adigun
With the World Bank rating Nigeria’s Naira among the worst performing currencies in Sub-Saharan Africa, an expert andSpecial Adviser to the Senate Committee Chairman on Capital Market, Professor Uche Uwaleke, has assured all and sundry that the national currency would soon rebound immediately the local refineries start functioning effectively.
He also advocated ‘Productive-Base Expansion/Diversification’, saying by changing the structure of the economy from mono product to a multi-product one is the only way for multiple sources of foreign exchange (forex) earnings.
Uwaleke, who dropped these hints at the 7th annual conference of the Guild of Corporate Online Publishers (GOCOP) last Thursday in Abuja explained that the moment Nigeria can stop fuel import, about 54 per cent of the cost of fuel would drop, noting that fuel importation accounts for 54 per cent of the fuel price. He said this should automatically reduce the bleeding of the naira and reduce inflation because fuel pushes up the prices of all other items. He, therefore, advised the Federal Government to intensify all strategies, among other measures, to get the refineries working, then the naira would firm up
Last week, the World Bank in its latest Africa’s Pulse report, disclosed that the Nigerian Naira experienced nearly a 40 per cent depreciation in 2023, making it one of the worst-performing currencies in Sub-Saharan Africa.
The report states: “So far this year, the Nigerian Naira and the Angolan kwanza are among the worst-performing currencies in the region: these currencies have posted a year-to-date depreciation of nearly 40 percent. Other currencies with significant losses so far in 2023 are those of South Sudan (33 percent), Burundi (27 percent), the Democratic Republic of Congo (18 percent), Kenya (16 percent), Zambia (12 percent), Ghana (12 percent), and Rwanda (11 percent).”.
These losses are attributed to various factors, including uncoordinated policy interventions and foreign exchange controls, which have also contributed to inflation in some Sub-Saharan African countries, such as Ethiopia, Nigeria, and Zimbabwe.
On the refineries, Uwaleke, who is also a professor of capital market at Nasarawa State University, Lafia, urged the Federal Government to sell or privatise government assets only at the Capital Market to ensure transparency, due process, corporate governance and spread of equity to interested Nigerians.
He stated: “By Promoting industrial parks and Privatization of state-owned businesses such as NNPCL through the capital market for inclusive economic growth: The NNPCL should be taken to the Capital Market, even if it’s a small percentage that is to be sold. This is because they will be under obligation to publish their records. Nigerians will take up equity in it. Saudi Arabia did so with Aramco where 5% was sold. Do part privatization of the refineries at the Capital Market”.
He also said states and regions should cooperate and build joint ventures in businesses peculiar to their areas and on which they hold comparative advantage.
Uwaleke harped on the highly cherished One-State-One-Product (OSOP) concept and build industries in the products they have adopted. “It is a pity that what they put in the OSOP project is N1m per year. Why not pump huge sums especially from the surplus to it and boost industrial ventures in states.”
In addition, he said it will be a boost to primary products to intermediate for finished products; and shift from import-dependency to export-led economy.