The Nigerian Economic Summit Group (NESG) has called on the Central Bank of Nigeria to remove capital controls on forex.
The group further warned of the implications the Russian-Ukraine war portend, citing that tensions have triggered global supply chain disruptions, largely affecting countries including Nigeria exposed to trade with the warring nations.
The NESG disclosed this in a report titled “Implications of Russia-Ukraine War: Risks and Opportunities for Nigeria” on Sunday, according to the News Agency of Nigeria.
They also urged FG to take advantage of the benefits of the African Continental Free Trade Area agreement (AfCFTA) and ensure effective border control to soften the impact of the fallout of the Russian invasion of Ukraine.
The group stated that the Russian invasion of Ukraine is expected to reduce Nigeria’s trade volume with both Russia and Ukraine, citing that supply chain disruptions caused by the war have negatively affected Nigeria.
They added that the war will also disrupt Nigeria’s access to global economy through trade, finance, commodity, technology transfer channel, foreign policy channel and migration channels
“The tensions have triggered global supply chain disruptions, largely affecting countries exposed to trade with the warring nations.
“Uncertainties will make investors seek safe-havens, and this could prompt capital outflows from emerging markets, including Nigeria.
“Constraints to supply due to the geopolitical tension have pushed up global commodity prices. This will generally fuel global inflation,” it said.
The Group added that Nigeria’s alliance with Russia could suffer a setback due to fears that she might face sanctions from the West like those on Russia, stressing that the war had also affected millions of migrants in Ukraine, including about 4000 Nigerians who are currently studying in Ukrainian universities.
The NESG, however, charged the Federal government to take certain key action points to mitigate the impact of the crisis on the Nigerian economy.
Some of these include; removing the constraints to agricultural productivity to improve food security and supporting value chain development to ensure that primary products are processed locally before they are exported; Implementing the Petroleum Industry Act in a holistic manner is key to attracting huge investments into Nigeria’s oil and gas sector; Leveraging the benefits of the African Continental Free Trade Area agreement (AfCFTA) and ensuring effective border control, and
Removing capital controls and encouraging the inflow of stable investments, such as Foreign Direct Investment.