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  • News - North Central - FCT
  • Updated: April 27, 2024

Ned Nwoko cautions CBN over Naira gain against US dollar

Ned Nwoko cautions CBN over Naira gain against US dollar

Senator Ned Nwoko, representing Delta North, has warned the Federal Government and the Central Bank of Nigeria, CBN, against taking any measures that might artificially raise the Naira's value versus foreign currencies.

In a statement made in Abuja on Saturday, Nwoko emphasised the need to tackle the core reasons for the Naira devaluation rather than relying on short remedies.

He emphasised that economic independence and currency strength are continuing efforts, emphasising the importance of reviewing existing policies regularly and considering new ones.

Nwoko emphasised the importance of a country's currency value in establishing international respect and collaboration, highlighting the need for Nigeria to increase the Naira demand.

As a significant worldwide supplier of crude oil and other commodities, Nwoko emphasises the exclusive use of Naira in transactions involving these goods. 

"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,“ the lawmaker said.

He claims that this reasoning is invalid when considering the tiny number of traders active in importing commodities into Nigeria, who account for a negligible part of the country's population.

“Therefore, the notion that foreign reserves are indispensable for trade balance equilibrium falls short upon scrutiny”, he noted. 

The legislator, who is a solicitor at the Supreme Court of England and Wales, stated that the recent appreciation of the naira was not primarily due to the CBN's new initiatives.

“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.

Since January, Nwoko has emphasised the need for important CBN initiatives to fight dollarization and preserve the Naira's stability.

The congressman stated that after the issuance of the statement, several methods had been implemented to enhance the Naira's value.

"However, the effectiveness of these policies has yet to be completely realised, as the underlying reason for Naira depreciation remains ignored.

"Until we confront the underlying issues head-on, our efforts against dollarisation will be in vain," he told reporters.

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