The Vice-President, Yemi Osinbajo has asked the Central Bank of Nigeria (CBN) to review its strategy on foreign exchange for the Naira value to reflects the market reality, rather than the “artificially low rate” that deters investors from bringing forex into the country.
“As for the exchange rate, I think we need to move our rates to be as reflective of the market as possible. This, in my own respectful view, is the only way to improve supply,” Osinbajo said.
Osinbajo’s commented on the forex in the progress report at the Mid-term Review of President Buhari Second Administration on Monday in Abuja. His concerns came on the heels of others that have criticised the apex bank’s management of the forex market.
“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is my view” noted the vice-president.
Currently, the Nigerian currency stands at N411 to $1 at the official side of the market, while the Naira goes for about N565 at the parallel market.
“There must be synergy between the fiscal and the monetary authority. We must be able to deal with the synergy, we must handle the synergy between the monetary authority, the CBN, and the fiscal side.
The vice-president also took a swipe at the various intervention programmes of the CBN which he said, should be handled by the ministries in charge of the sectors where the programmes fall.
Some of the intervention programmes include the Anchor Borrowers Programme (ABP) in the Agriculture sector, the Cotton/Textile Intervention programme, MSMEs intervention programme among several others that are clearly outside the core competence areas of the Nigerian apex bank
“Sometimes, it appears that there is competition… If you look at some of the interventions, you will find that those interventions are interventions that should be managed by ministries”.
“The Ministry of Industry, Trade and Investment should handle MSMEs interventions, and we should know what the CBN is doing. In other words, if the CBN is intervening in the MSME sector, it should be with the full cooperation and consent of the ministry of industry.
“Sometimes you will get people who are benefiting more than once because we simply have no line of sight on what is going on, on one side.”
He stated that there should be one clear economic plan, not two, saying “we cannot have a CBN led economic plan and a government-led plan. We would end up duplicating, and even there may be beneficiaries of grants benefiting multiple times.”
On how Nigeria survived the economic challenge of 2020, Osinbajo praised President Buhari, saying, he deserves the credit for providing steady leadership through the crisis.
“Let me say on the whole, that we have been able to weather the storm of a very serious economic challenge.”
“I think that is largely due to the steady and stable leadership we received from the President. I think if Mr President had panicked in that period, we would have had a lot of difficulties, perhaps we would be in a much worse situation.
“He deserves the commendation for providing that steady hand when that was required,” Osinbajo said.
In June 2020, in response to the fallout of the pandemic, President Buhari mandated the Vice President as chair of the Economic Sustainability Committee, to coordinate the implementation of the ESP aimed at cushioning the economic effects of the COVID-19 pandemic.
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