By Folake Ogunleye
The President of the Chartered Institute of Bankers of Nigeria, (CIBN) Professor Segun Ajibola has said that Foreign exchange management remains a key enabler as Nigeria strives to improve on the citizens’ Human Development Index, adjudged at the moment to be below the international minimum benchmark.
He made this known at the 2017 Fellowship Investiture of The Chartered Institute of Bankers of Nigeria, in Lagos at the weekend.
According to him, with the over-reliance on imports of basic needs and export of mono-product, the success of any policy initiatives towards repositioning Nigeria’s foreign exchange management template would depend largely on the quality of the human minds to implement such policies.
He said, “It should be reaffirmed that the macro-economic objective of exchange rate stability and equilibrium balance of payments position can be achieved if only we tame our high propensity to consume imported consumer durables and non-durables, promote non-oil exports and pursue the age-long import substitution strategies.
“While Nigeria as a country has experimented with different exchange rate regimes, opinions are still polarized among economic experts on the best policy option in the management of the country’s foreign exchange. Principally, there are two extremes of exchange rate regimes – fixed and floating – with different shades of combination.
“ The choice of exchange rate regime depends on a country’s level of development and the policies governing the monetary and financial fundamentals of such economy. Most developing economies tend to adopt fixed exchange rate regimes in order to build confidence in their economic policies whereas the more advanced ones lean towards a flexible regime as they become more active in international financial markets.
“When Nigeria transited to what I call “a managed floating exchange rate regime” in June 2016, questions were raised on the appropriateness and timeliness of the policy. In the past few months, the country has witnessed some stability in the foreign exchange market especially with the interventions of the Central Bank of Nigeria in the market since February 2017.
“I imagine, however, that in order to achieve a more sustainable transition to a flexible exchange rate regime there is the need for a religious commitment to transparency and accountability in the management of the country’s foreign exchange market by all stakeholders,” he added.