Catholic agencies caution Federal Govt against naira devaluation

AS the Federal Government ponders over calls for the devaluation of the naira, Caritas Nigeria and Justice Development and Peace Commission, JDPC, agencies of the Catholic Bishops Conference of Nigeria, yesterday advised that no responsible government hands over its currency exclusively to market forces.

A statement by the Executive Secretary, Caritas Nigeria, Rev. Fr. Evaristus Bassey, lamented that the issue has gathered momentum because of the critical voice of the Emir of Kano, former Central Bank of Nigeria, CBN Governor, Lamido Sanusi, IMF and other neo-liberal monetary institutions are championing the cause.

The two Catholic agencies reiterated the fact that Economics is not a pure science like Chemistry or Physics with immutable formulas, thus economists cannot lay claim to possessing the entire truth concerning the economy.

They therefore called on the Buhari administration to grow the economy through a strategic budget and go with zero budgeting as it has said it would embark upon, so as to give way to a medium term expenditure framework, as this is a policy gain that should not be discarded.

“Nigeria’s economy is beyond economics. The economy does not function irrespective of the politics of the land. There are therefore many other factors to be considered beyond the availability or not of foreign exchange,” JDPC and Caritas maintained.
“In our opinion, besides the naira being actually undervalued due to its present purchasing power parity, no responsible government hands over its currency exclusively to market forces. The policies enunciated by the CBN to support the naira may be excruciating in the short term, but in the long run, they would help the economy.”

They observed that a situation had developed in which politicians no longer respected the Naira but were using dollars as the means of exchange, adding that the dollarization of our economy has drastically reduced the naira with the introduction of these measures.

The JDPC and Caritas further maintained that the CBN should however, ensure that those who have genuine letters of credit be supported to meet their obligations so that we do not have a deepened and sustained loss of confidence in our economy.

On the argument to devalue in order to attract investment, they described this as spurious and porous because the so-called investments would remain largely in financial and not in the real sector, and so find their ways out as soon as there are negative indications.

“Nigerians’ stock of liquidity is huge. Nigerian politicians should bring out all the money they have appropriated to themselves and invest in the real sector of the economy, so that country’s economy may experience genuine growth.

The two agencies continued: “Our major export, oil, doesn’t need our currency to be devalued in order to increase demand for a product that is already experiencing glut in the market.”