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NACCIMA calls for single exchange rate

By Franklin Alli

THE Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), yesterday, called for a single exchange rate in the country, saying the existence of multiple exchange rates was not good for investors confidence.

The Chamber also demanded for reconstitution of boards of the federal parastatals and a review of the federal government’s economic team to include members of the Organised Private Sector, OPS.

President Muhammadu Buhari and Vice President Yemi Osinbajo at the opening of a 2-day National Economic Council Retreat at the Statehouse Conference Centre on 21st March 2016.

National President, NACCIMA, Chief Bassey Edem, who stated this while presenting the Chamber’s review of the economy in 2016 and outlook for 2017, said, “There is need for the harmonization of the various exchange rates in the country. A situation where there exist various rates for different purposes does not auger well for the polity. It also does not boost investors’ confidence.”

The NACCIMA boss added, “It is over 18 months since the Boards of the Federal Parastatals were dissolved by the present administration. Apart from it being illegal for the parastatals to operate without boards, the non-reconstitution of the various boards encourages corruption and ineptitude.

Transparency and accountability

We counsel that the President should as a matter of utmost urgency, reconstitute the Board of the various parastatals to encourage prudence, effective decision making, transparency and accountability.

“Also, we strongly believe that it is time to review the composition of the Economic Team to include representatives of the Organized Private Sector in order to remain focused in getting the country out of the current recession. The Nigerian economy is currently facing multiple challenges with the highest inflation in recent times, high lending rates and unemployment; declining foreign reserves; and negative GDP Growth rates. Thus, our outlook for the year 2017 should focus on policy formulation with the following short-term goals:

“Policy Cohesion: Monetary Policy remains focused on controlling inflation by maintaining a double-digit Monetary Policy Rate. However, the cost-push nature of the current inflationary trend presents an opportunity to reverse this trend. Fiscal Policy, in the short-term, should focus on pushing down costs especially those related to power generation as this has been shown to be a major component of production costs.”

“Possible policy directions are the liberalization of the Petroleum Industry or increased private sector participation in the Power Sector.

With reduce production costs will come reduced product prices; a lower inflation rate would encourage a fall in the MPR and interest rates effectively channelling more funds to the real sector.

“Foreign Exchange: In the coming year, we are optimistic that rising prices of crude oil and a de-escalation of Niger-Delta militancy will lead to accretion or steady increase in the nation’s foreign reserves, thereby eliminating the artificial scarcity that exists in the foreign exchange market. In light of this, we are hopeful that market forces will be allowed to govern the process to determine prices.

“Policy Monitoring & Evaluation (Transparency and Open Government Data): The presentation of the 2017 Budget to the National Assembly has given the private sector the opportunity to examine the trend in government expenditure. Transparency in this form provides invaluable feedback to government and creates a sense of accountability in all arms of government. In the short-term, policies that ensure transparency and openness in government data will largely improve government efficiency. An effective Monitoring and Evaluation system is a sure bet for effective management of resources.

“Food Security, Import Substitution and the Manufacturing Sector: Federal Government policies should stimulate local production and processing of raw materials. Although protection of infant industries by banning foreign alternatives may be necessary to correct the imperfections in the market, the government should realize that the abrupt nature of such sudden policy shift “banning” creates uncertainty even within the industry to be protected. As such investor-confidence should be paramount in the design of policy and implementation.”


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