Edo State Governor, Adams Oshiomole has stated that the devaluation of naira will only work for Nigeria if the country re-order its consumption pattern and pursue a sustainable foreign reserve policy.
The governor who was the keynote Speaker at a colloquium organized by TheCable noted that the decline in the price per barrel of oil and the insatiable appetite for imported goods will hamper any gain accruable from devaluation.
Analyzing the pros and cons, Governor Oshiomole said that devaluation will not only stir a rise in the demand for Nigerian goods but increase the foreign reserve. He however noted that the consumption pattern of the elite will leave the policy ineffective.
“In 2014, our foreign reserve was $42.8, $37.3 in 2015 and presently $28. It keeps decreasing and if care is not taken, it will be equal to zero in few years.
“If we assume that devaluation will work based on market forces, what about the looters who spend irrationally, even if the Naira is devalued at further, it will not curb the appetite of the elite to import their toothpick, send their children to school abroad and go on medical tourism.”
Bemoaning the economic situation of the country, the former NLC president said that the greatest economists in the world are the poor.
“The poor are the greatest economist ever. You wonder how they are able to manage their meagre earnings such as the 18,000 minimum wage and yet not borrow.”
The governor said that instead of devaluation, the county should look towards import substitution and strong foreign exchange policies.
“If devaluation was an answer, we would have had the breakthrough years back. We have devalued many times and yet the naira has not been delivered.”
“I suggest rules and regulations should be made and enforced. I was in a hotel in South Africa and when I wanted to pay my bill, they told me to change the Dollars with me into Rands before I could pay. That will not happen in Nigeria. We should learn to defend the naira and not devalue it.”
“We also need to encourage the Central bank to get more aggressive. The bank should stop funding medical and academic trips. If the bureaucracy wants quality education and medical attention, then they should spend on our universities and hospitals”.
In his concluding remark, the governor charged economist to think outside the box as exchange rate is not the only way to grow an economy.
Present at the colloquium are; Bismark Rewane, CEO Financial Derivatives, Issa Aremu, Deputy National President, Nigeria Labour Congress(NLC), Moses Tule, Director, CBN Monetary Policy Department and Vincent Nwane, Director of Research, Lagos Chamber of Commerce and Industry.