From Amechi Ogbonna, Washington DC
Amidst raging calls by the global business community, especially at the ongoing Spring Meetings in Washington DC, USA, for the Nigerian government to float the Naira, and liberalise its financial market, the Central Bank of Nigeria (CBN), at the weekend said the country had no intension of floating its currency in the face of its many security challenges.
Proponents of the proposal to float the Naira had argued that it would make the Nigerian economy more competitive and encourage foreign investors to come into the country.
But reacting to the calls by some participants at the Spring Meetings of the IMF / World Bank, CBN’s spokesman, Isaac Okoroafor, said the nation’s market was already extensively liberalised, hence the call to float the Naira was a bit laughable.
“ Yesterday (Thursday) when Madame Lagarde was discussing the economy of Egypt, she lamented herself, the devastating inflation that is in that country.
Egypt, which has half Nigeria’s population, receives about $12 billion in foreign earnings and several billions from tourism.
We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to benefit from massive depreciation.
If you float the Naira today, and given recent discoveries by security agencies, you’ll discover that our case will be terrible. Egypt today has an inflation rate of almost 31 per cent, and Angola also has about 36 per cent inflation, ours is at 17.26 per cent.
If we float the Naira and we allow speculators and those with corruption money and all the people who create the bubbles in the economy to launch into the market, you can imagine the kind of situation we will get ourselves into”, Okoroafor said.
According to him, no country floats its currency; and just leaves it to the dictates of the market.
Meanwhile, the bank has threatened to deal decisively with deposit money banks implicated in alleged efforts to frustrate Small and Medium Enterprises (SMEs) entrepreneurs from accessing foreign currencies to boost their operations. The warning came on the heels of widespread allegations that SMEs regarded as the live-wire of the nation’s economy are being frustrated from accessing the $20,000 special intervention fund approved for operators per quarter by the apex bank
Speaking at a special press briefing on the sidelines of the ongoing Spring Meeting of the IMF/ World Bank in Washington DC, USA, Mr. Isaac Okoroafor, warned that the apex bank would sanction any deposit money bank that puts wage in the wheel of progress of the current economic reform programme of the Federal Government.