ACCI links naira depreciation to illicit financial transactions, corruption

The President of Abuja Chamber of Commerce and Industry (ACCI), Emeka Obegolu, said naira depreciation could be attributed to illicit financial transactions and corruption in government circles.

Obegulo expressed worry over the daily dwindling value of the naira against the dollar, saying the development will continue to push back the growth of the economy if urgent steps are not taken to address the trend.

The ACCI boss, who spoke to journalists yesterday at the ACCI headquarters in Abuja, said the sharp decline of naira in the foreign exchange market is primarily due to illicit naira transactions as well as the undervaluation of the currency.

“The core issue lies in illicit naira transactions for dollars. Government must tackle this illicit practice head-on. I am convinced that the naira is undervalued, with its true value estimated to be between 800 and 1,000 naira. The undue strain on the naira is predominantly fuelled by corrupt practices rather than legitimate business activities. Thus, addressing corruption is paramount,” Obegolu stated.

On food inflation, the ACCI President underscored the need for the government to implement measures aimed at boosting citizens’ purchasing power and avoid imposing arbitrary taxes on imported goods.

He stressed that importers inflate prices due to the high costs associated with clearing at the ports.

Obegole also explained that governance should not be about prioritising revenue generation but should also focus on ensuring citizen satisfaction.

Obegolu recommended a shift in the approach of the government, advocating that support be extended to local businesses to enhance competitiveness and encourage local production of goods currently being imported.

“There is no valid reason shoes imported from China should be cheaper than the ones produced in Aba. However, this pricing disparity persists today. It indicates that the Chinese have harnessed technology to reduce production costs. Therefore, the government needs to invest in technology to bolster local enterprises.

“As a local entrepreneur importing machinery from China for shoe production, you acquire dollars at official government rates. In instances where you are unable to secure it, you resort to the black market. Subsequently, if there are unfavourable changes in exchange rates by the government before your goods arrive, you encounter challenges.

“This could result in additional borrowing to clear goods and navigate various checkpoints, ultimately diminishing your competitiveness.

With the removal of petrol subsidies, heightened government support is urgently needed,” Obegolu highlighted.

Obegolu stressed the importance of avoiding speculations and baseless accusations against bank chief executive officers regarding dollar hoarding.

He urged the government to eradicate all avenues for malpractice and penalize any offenders identified by relevant authorities.

“The Economic and Financial Crimes Commission (EFCC) should present concrete evidence on how bank CEOs hoard dollars while declaring profits. Speculations can unjustly damage reputations by implicating both innocent and guilty parties. Therefore, reliance on factual information is crucial. We must ascertain how these activities are conducted and hold wrongdoers accountable.”