.Experts meet today to discuss peering, interconnection in Ghana
The Institute of Chartered Accountants of Nigeria (ICAN), yesterday, warned that the much-anticipated foreign exchange stability and economic growth may remain elusive if lasting solutions are not provided in the short, medium and long-term, as against the quick fix interventions by the Federal Government.
It noted that the Nigerian National Petroleum Company Limited’s (NNPCL) $3 billion Afrexim Bank borrowing to fix foreign exchange liquidity might prove insufficient.
ICAN, therefore, recommended short-term measures like postponement of implementation of non-critical dollar-denominated components of the 2023 budget until the foreign exchange situation improves, as well as the need for government to address speculative demand for dollar through confidence-building strategies, and incentivising of Diaspora remittances through formal channels.
Its 59th president, Dr. Innocent Okwuosa, who addressed journalists in Lagos, explained that while the introduction of a price verification system in respect of ‘Form M’ by the government is commendable, there should be easy access to foreign exchange by genuine users, with minimal documentation.
Form M is a mandatory statutory document to be completed by all importers for importation of goods into the country.
According to him, the government also needs to institute accountability and transparency within the oil industry and foreign exchange market, establish whistle-blowing lines to report banks involved in round tripping and activate relevant laws to sanction persons or institutions behind dollarisation of the economy.
On the medium-to-long term measures for the demand side, he suggested that the government should tackle inflation and reduce currency substitution on account of low purchasing power of the Naira, and encourage patronage of made-in-Nigeria goods, using enabling laws.
Okwuosa advised the government: “Improve the standard of education and health facilities in the country to reduce education and medical tourism. Encourage companies operating in Nigeria to source raw materials locally via backward integration. Fix the refineries to reduce import of petroleum products with attendant reduction in FX pressure. Incentivise existing modular refineries and the establishment of new ones. And revisit the Nigeria-China currency swap to reduce demand for the dollar.”
He added: “Government must reduce the cost of governance, particularly on foreign travels and allowances. On the supply side, diversify the export base, especially through agriculture and solid minerals. Set up a Fiscal and Monetary Policies Coordinating Committee, to among others, ensure goal congruency and stability in policies that address macroeconomic indices, tackle corruption and insecurity to make way for increased Foreign Direct Investments (FDIs).”
Okwuosa said the government must equally undertake comprehensive economic reforms, improve governance, policy consistency and make concerted efforts to diversify the economy.
He warned that currency devaluation should be the last resort to the economic imbalance, adding that his organisation was ready to assist the government and other stakeholders in moving the country forward.
