Could there be respites in naira free fall at forex market?
The increasing free fall of naira in the foreign exchange market is perturbing as the forex trading determines fuel pump price increase by the marketers, inflation and Nigerian citizens are at the receiving end of the untold economic hardship.
Though, President Bola Ahmed Tinubu-led Federal Government is making effort but he must do something drastic to cushion the effect of the downturn before the situation gets worse as crime rates keep rising by the day because of hunger & poverty.
The Acting Governor of Central Bank of Nigeria (CBN), Mr Folashodun Shonubi emphatically stressed that Mr. president expressed concerns about the likely negative impacts of the fall on ordinary citizens and their daily businesses while briefing State House correspondents after a meeting with President Tinubu in Abuja yesterday.
Precisely, as at Monday August 14, 2023, the Naira sold for N930 to a dollar in the parallel market and N700 in the Investors and Export (I&E) window which is becoming worrisome as inflation continues to bite more harder in the market becoming unbearable for Nigerians.
The CBN Governor warned foreign exchange speculators of severe consequences as the federal government rolls out stringent measures. The market trend was not solely caused by economic forces, but rather by speculative demand. He assured efforts were on to stabilise the forex market.
“Mr President is very concerned about some of the goings on in the foreign exchange market. One of the things we discussed is what could be done to stabilise and what could be done to improve the liquidity in the market and also the goings on in the various other markets, including the parallel market. He’s concerned about its impact on the average person, since, unfortunately, a lot of activities that we do, which are purely local, are still referenced to exchange rates in the parallel market.
“We’ve discussed and I’ve shared with him what we’re doing to improve supply. If you look at the official market, you’ll find that that market has been fairly stable and the spreads of the difference have not fluctuated as much.We do not believe that the changes going on in the parallel market are driven by pure economic demand and supply, but are touched by speculative demand from people,” he said.
Speaking on the way out of the seeming fiscal logjam, Shonubi said, “Some of the plans and strategies, which I’m not at liberty to share with you, means sooner rather than later, the speculators should be careful because we believe the things we’re doing, when they come to fruition, may result in significant losses to them.
“But my presence here is more about the concerns the President has and his needs to know that we are doing something about it, assurances of which I have given him totally. So I hope this helps. We are looking at it and we’re doing things that will significantly impact the market in a few days time and we will all see it. The intention is to ensure the environment operates at a level that’s more efficient, but also that is also very reasonable and does not have a negative impact to the best that we can on the lives of the average person.”
Pertinently, the concern is coming as the Nigeria Labour Congress (NLC) threatened a nationwide strike, if for any reason; the federal government allows a further hike in prices of Petroleum Motor Spirit (PMS), otherwise called petrol, even when the palliatives were yet to be rolled out or reviewed to the people.
The NLC President Comrade Joe Ajaero issued the threat at the ongoing African Alliance of Trade Unions meeting in Abuja. While reacting to the advice of the Registrar of Trade Unions on how labour should conduct themselves as they carry out their responsibilities of protecting the interest of workers and Nigerians by extension, Ajaero pleaded with the federal government to change “those bad economic policies that make our wages next to nothing. As we are here now, they are contemplating on increasing the pump price of petroleum products. But the Minister of Labour for some time now will only go to Minister of Justice to come up with injunction to hold the hands of labour not to respond. They have started floating ideas of a likely increase in the price of petroleum products.
“But let me say this, Nigerian workers will not give any strike notice. If we have not addressed the consequences of the last two increases of fuel pump price, and we wake up from our sleep to hear that they have tampered with the fuel pump price again. I want to plead with government that those bad economic policies that make our wages next to nothing, should be checked. If you check those policies that lead to inflation, and devaluation of the currency, we will be comfortable even where we are. If naira is at par with dollar today, we will asks you to leave minimum wage at N30,000.
“If inflation is checked to zero, we will ask you to leave things the way they are. But inflation is flying, and by the admittance of the National Bureau of Statistics, we have over 133 million Nigerians that are multi-dimensionally poor. I think these are the issues government should address. If we go for wage increase tomorrow, the inflation that will follow suit will destroy it. The Nigeria Police, the IG is now performing the duties of the Ministry of Labour. The duty of Ministry of Labour includes addressing the issue both inter and intra union disputes. It is not within the purview of the Inspector General of Police to go into that area. And I think there is need for the Ministry of Labour to educate the police, to tell them that they don’t have the right to usurp its functions. If they do that, the Ministry of Labour will go into extinction and there’ll be no basis for Minister of Labour to remain there. We say it is legal and we demand an apology from the IG of Police for arresting or even contemplating to arrest the president of the National Union of Road Transport Workers, for whatever reason, on the eve of the election. It is unheard of in the history of this country. And never again should this be entertained. Nigeria Police against Nigerian workers, we will not waste time too much to their offices. Let them use the same gun that was bought with the workers’ tax to engage us. Go and collect your functions from Ministry for Police and for Ministry of Justice. Even when there is a dispute intra or inter, it is your function to refer such to NIC. As the Nigeria Labour Congress that relates with the Ministry of Labour so much, we are afraid that your work is going into extinction. But we’re here ready to cooperate with you, laugh with you and fight with you at the appropriate time,” the NLC president further said.
The President Tinubu Chairmanship of the Economic Community of West African States and his Team of other President should in collaboration with African Unions begin to channel the same energy in the Niger Coup to refocus on having single currency exchange proposal as it’s one of the agenda in the African Continental Free Trade Area (AfCFTA) agreement to see the light of the day.
Ultimately, the Federal Government should initiate policies that that will increase the infant Industries mainly to encourage exportation of local commodities and deliberately discourage, put a ban in importation of commodities and services into the country to make our currency stronger again. Also, the government should abolish all transactions in dollars whether being it at airport, seaports, international hotels among other social edifices.
