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HOW TO SAVE THE NAIRA: Exclude more items from forex market —Oshiomhole

NLC to demand N48,000 minimum wage

By Babajide Komolafe, Emma Ujah, Yinka Kolawole & Nkiru Nnorom

LAGOS—EDO State Governor, Mr. Adams Oshiomhole yesterday called for increase in the number of items excluded from accessing foreign exchange in the country as part of measures to protect the nation’s currency from further devaluation.

Meanwhile, the Nigeria Labour Congress, NLC, said it would soon submit a proposal demanding for a new minimum wage of N48,000, based on the impact of the devaluation of the naira on wages.

Speaking in Lagos in the first TheCable Colloquium, titled, “The Naira on Trial: To devalue or Not,” Oshiomole said that further devaluation will not solve the nation’s problem, especially the appetite for imported goods, which he argued is the real problem bedevilling the economy.

Devaluation will not curb importation
Citing statistics on foreign trade, he noted that previous bouts of devaluations have not reduced importation of goods or increased exportation as canvassed by proponents of devaluation, as imports have continued to increase despite devaluation of naira.

He said: “More than that, the real critical question that settled this debate is, will devaluation curb our appetite for imported goods? The evidence with CBN shows that prices in the Nigerian economy do not curb the appetite for foreign goods. The last time the CBN devalued from N158 to N198 around 2014, as a matter of fact, our export actually declined by 34.1 per cent and our import increased by 2.9 per cent after that devaluation.


“Now, I can imagine the reason you have this abnormality and this brings us to the initial question. When human being does not labour to earn, they do not spend rationally and because you have so much money, this period also coincided with the period politicians were preparing for election and all the things that politicians have to do. If a lot of money is accruing to people like that, their spending cannot be rationale, so even if you devalue 300 per cent, it will not curb the appetite of the elite for imported goods, imported toothpicks , frozen chicken, and Brazilian hair.”

Investment bankers prosecuting the naira
Oshiomhole noted that the current agitation for devaluation of the naira is been spearheaded by investment bankers, who thrives on currency manipulation and speculations.

He said: “Rather than the government as it used to be in the past indicating its intention to devalue, it is a section of the people that are behind this agitation. Who are these people?  The investment bankers who want to trade on  bonds and other commercial papers. They don’t want any interference. You can use visas to restrict and regulate the movement of human beings but CBN must not use any instrument to regulate the movement of dollars in or out of the country.”

NLC demand for N48,000 minimum wage
In his own contributions, Deputy National President, Nigeria Labour Congress, NLC, Comrade Issa Aremu, warned against further devaluation, saying that previous devaluation has corroded the value of the minimum wage.

He said: “The last time we signed the minimum wage, which is N18,000, which is the current rate, and this was between 2009 and 2010, this translated to $124. But now on account of depreciation alone, this $124 has dropped to less than $60. So wages have been completely eroded on account of devaluation. So in nominal terms, if we are talking just on account of the exchange rate, the minimum wage which is currently N18,000 should be about N48,000. And I am leaving this warning, if you dare devalue again, be sure that labour will also have to hike its own price in the market.”

Forex restrictions  threaten 80,000 jobs
Meanwhile the Lagos Chamber of Commerce and Industry, LCCI, yesterday, warned that the current foreign exchange restrictions especially the exclusion of 41 items from the foreign exchange market might lead to loss of 80,000 jobs in the manufacturing sector.

This he said was due to inability of manufacturers to access foreign exchange even for items not excluded.
Speaking on behalf of the Chamber at TheCable Colloquium, Dr Vincent Nwanem, said: “Is the high rate an issue for manufacturers? No, the major issue now is access. Even the goods that are not listed in the 41 items, our members cannot even fund dollars to fund them.”

CBN, banks lament forex demand for invisibles
The Central Bank of Nigeria, CBN, and Deposit Money Banks, DMBs, have cried out over what they considered as abnormal demand for foreign exchange, forex for “invisibles,” especially for school fees and health tourism.
CBN’s Director of Banking Supervision, Mrs. Tokunbo Martins, who briefed journalists on the outcome of yesterday’s Bankers’ Committee meeting, in Abuja, said that the monetary authorities would not allow that category of demand to crowd out the real sector of the economy in the forex market.


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