•As NECA seeks overhaul of exchange rate mechanism

By  Franklin Alli

MINISTER of Budget and National Planning, Senator Udoma Udo Udoma, has enjoined the Orgainsed Private Sector (OPS) to actively participate in the implementation of the  federal government’s Economic Recovery and Growth Plan, ERGP, saying: “It is the blueprint to fix the broken economy.”

Udo Udoma

This is even as Nigeria Employers Consultative Association (NECA), an arm of the OPS, has called for overhaul of Central Bank of Nigeria (CBN)’s exchange rate regime to allow market forces to determine the value of the Naira.

Senator Udoma, in his keynote address, delivered during the 60th Annual General Meeting of NECA, yesterday, in Lagos, stated: “The ERGP is this administration’s blueprint aimed at building a new Nigeria where we grow what we eat, consume what we make and produce what we use.” He added that the benefits of the ERGP cannot be enjoyed unless it is effectively and faithfully implemented.

He stated: “The targets set by the government in the ERGP are achievable but the success of the plan depends on the responsiveness of the private sector to the initiatives being rolled out by the government under the Plan. It requires extensive collaboration with the private sector for its effective implementation.

“ERGP is the blueprint the administration intends to use to fix the broken economy. There is no doubt whatsoever, that successful implementation of the ERGP will revitalize the economy and put it back on the path of sustained, inclusive, and diversified growth and development.”

Also speaking, Mr. Larry Ettah, NECA President, said the abolition of  the current exchange rate regime by CBN became necessary because the fixed exchange rate system with its attendant multiple rates does not augur well for the business community in terms of right pricing and effective means of resource allocation.

“Though it seemed lately to have provided some reprieve for the value of the local currency, it is doubtful if this is sustainable in the long term. Evidence from other economies are clear and compelling to the effect that floating exchange rate systems  enable economies respond best to declines in the value of  their exports and provide a natural adjustment mechanism to preserve foreign exchange reserves and change incentives and behaviour of economic actors. This is the reason we are convinced that the way to go is to allow market forces to determine the value of the Naira and consequently abolishing the multiple rates,” he said.