“Substantially re-evaluate” is a soft and kind term for devaluation. – Jide Salu
Vice President, Professor Yemi Osinbajo, in the presence of the current economic challenges facing the country, said on Wednesday that Nigeria is in the move to “substantially re-evaluate” its foreign exchange policy, adding that a “more flexible approach” to the currency should be expected “soon.”
He told investors, “We expect that with a more flexible policy, we will be able to attract more capital into the system and ease business.”
This was contained in his speech on Wednesday evening while addressing investors in a conference organised by Renaissance Capital in Lagos State.
He added, “We expect very soon we will see a more flexible approach to the currency.”
Nigeria’s Economy has come under heavy attack following the drop in the price of oil, which is the country’s main export.
However, the International Monetary Fund has advised those piloting the country’s economy to allow greater exchange rate flexibility as “the first line of defence.”
Despite the slowdown in foreign exchange earnings as a result of the fall in oil price, President Buhari has stood his ground that the naira should not be further devalued.
The president has repeatedly aired his support for the governor of the Central Bank, Godwin Emefiele’s maintaining of the naira’s official rate at 197-199 against the dollar since March 2015.
This, the Nigerian business community and foreign investors have frowned at, saying that the presidency is interfering in monetary policy, which according to them, is hurting the central bank’s independence.
Osinbajo continued, “We believe there must be some substantial re-evaluation of the foreign exchange policy especially with a view to increasing foreign exchange supply, encouraging capital importation and also being able to allow free flow of remittances…
“We expect that with a more flexible policy we will be able to attract more capital into the system and ease business…”
The vice president said that the executive is “not responsible for monetary policy” but added that he hoped the central bank would act soon with the policy changes he talked about.