By Francis Akinnodi
Some financial experts said improved local production of commodities, increased consumption of local products, and reduced importation of goods and services would help to stabilise and strengthen the Naira.
They made this known in separate interviews with The Hope.
An economist, Professor Timothy Awe said it would be advantageous if the Nigerian government can price commodities for export in Naira.
“We are not producing anything, and the only thing that can help the Naira to stabilise is when we produce commodities that can be exported.
“Our exports should also be priced in Naira. Even our crude oil; we have very quality crude, it should be priced in Naira.
“People say it would be difficult, but have we tried it? If we try it and it does not work we can change it,” he said.
He said that local production and manufacturing of constables would put Nigeria in a position to determine the value of the Naira.
The don said that the Naira appeared relatively stable in the past because government was supporting the currency with local and external borrowings.
He added that the recent lifting of the ban on FX supply to importers of 43 commodities, which were banned by the Muhammadu Buhari government, would further exert pressure on the Naira.
“People would start looking for FX to bring those commodities in. This would further put pressure on the Naira. We need to avoid foreign goods and consciously work to firm up the Naira.
“Nigerians have a penchant for foreign goods. If we all decide not to import anything and consume what we can produce, the Naira will firm up.
“In the past, government was supporting the Naira with borrowings. That era is over. Now, we will need to look inwards to increase production and also reduce the cost of governance, ” he said.
Meanwhile, a financial consultant, Lai Omotola, said the soaring dollar to Naira rate was not driven by market forces.
According to Omotola, the rate is influenced by wealthy elite businessmen, whom he described as “market cabals”.
“I have never seen elite business people whose only business is to speculate on their currency. That’s the only business they do.
“They may have a manufacturing plant, no doubt about it. For instance, the manufacturing plant needs 10 million dollars, so they need to buy dollars.
“But nobody is investigating if their actual need is 10 million dollars or if they need less.
“So, most likely, they only needed one million dollars, but they would collect 10 million dollars.
“They would send the one million dollars to their supplier, convert the remaining nine million dollars to Naira, and go and sell it to the black marketers.”
According to him, “when you have a gap of over N300 in the exchange rate and you are selling nine million dollars, you are making N270 million without having a staff or investing anywhere, but by just taking dollars in and out.
“When this present government was floating the Naira, it was to make the difference between the Naira at the official market and the parallel market not to exceed N2. That is the meaning of floating.
“But the government has forgotten that when you float the Naira, there is no dollar in the Central Bank of Nigeria to back that Naira, and it is a matter of demand and supply.”