Senator Ned Nwoko, has advised the Federal Government and the Central Bank of Nigeria (CBN) against any measures that ‘artificially’ force the Naira to gain value against other currencies.
Nwoko, who represents Delta North, gave the advice in a statement he personally signed and made available to journalists in Abuja during the weekend.
He advised them to concentrate on tackling the main issues responsible for the Naira depreciation, saying there was no short-cut to success.
He said the quest for economic freedom and the strength of the nation’s currency was an ongoing journey.
Nwoko also said the continuous revisit to previously implemented policies and considerations of new ones were imperative.
He also said the value of a sovereign nation’s currency was the cornerstone of respect and collaboration among nations, while reiterating that Nigeria must stimulate Naira demand.
According to him, as a nation that exports crude oil and other commodities globally, it is imperative that all transaction on these items be conducted exclusively in Naira.
“This will incentivise buyers to seek out Naira, thereby driving its appreciation due to increased demand and scarcity.
“Moreover, the foreign reserve policy warrants reassessment. The practice of maintaining reserves in foreign jurisdictions, termed ‘foreign reserves,’ is not only objectionable but also counterproductive to Nigeria’s economic sovereignty.
“Unlike other nations like the United States, Britain, France, and Japan, which hold their reserves domestically, Nigeria’s adherence to this practice raises questions about its colonial legacy.
“If our early indigenous leaders acquiesced to this approach due to colonial influence, why should we perpetuate it? The primary rationale often cited to justify foreign reserves is trade balance maintenance,” Nwoko said.
According to him, this argument lacks merit when considering the limited number of traders involved in importing goods into Nigeria, which constitutes a negligible fraction of the nation’s population.
“Therefore, the notion that foreign reserves are indispensable for trade balance equilibrium falls short upon scrutiny,” he said.
The lawmaker who is a Solicitor, Supreme Court of England and Wales, there was the need to acknowledge that the recent appreciation of the Naira was not solely attributable to the CBN’s new measures.
“Rather, it can be attributed to the decline in refined oil imports following the production and distribution of refined petroleum from the local refinery – the Dangote refinery.
“Now envisage if other heavily consumed products were locally produced instead of imported. The success would be monumental and conspicuous,” he added.
In January, in a statement, he had preferred crucial measures to be adopted by the federal government CBN to combat dollarisation and stabilise the Naira.
Nwoko said that since the dissemination of that statement, various measures have been implemented to bolster the value of the Naira.
“However, the efficacy of these measures is yet to manifest fully, as the root cause of Naira devaluation remains unaddressed.
“Until we confront the underlying issues head-on, our efforts against dollarisation will be in vain,” he said.