The Chairman of Zinox
Group, Dr. Leo Stan Ekeh has warned that its too late to devalue Naira at this
time, when Nigeria’s foreign reserve is navigating for recovery and stability, reports ITRealms.
Dr. Ekeh who is
leading a team of foremost Nigerian integrated Information and Communication
Technology (ICT) conglomerate, gave this advice in Lagos recently, at a reception
organized in honour of his 60th birthday by a select group of ICT
Media entrepreneurs at the Sheraton Hotel – Ikeja, Lagos.
Condemning calls for
the devaluation of Naira, Ekeh noted that it was too late to devalue the naira
as the move will only serve to further impoverish the masses and plunge the
country into a state of hyper-inflation.
According to him, prevailing
circumstances in the nation’s fiscal and monetary framework is in line with
developments in the global oil market which makes devaluation a needless
venture at this time in point.
Ekeh recalls that since
the beginning of 2016, Nigeria has had to contend with reduced government
earnings from the sale of crude oil, with the current administration especially
hard-hit by the dwindling prices of the commodity in the global market.
This, he said, prompted
the Central Bank of Nigeria (CBN) to impose strict forex rules to save its reserves
while battling the pressure from various quarters to devalue the naira.
Ekeh wondered what would
happen to already stretched wage earners and whether their salaries will be
linked to rate of inflation as is the standard globally, lamenting that lots of
states in Nigeria, currently cannot pay the minimum monthly salary.
“If devaluation
happened mid-last year it would have made sense and encouraged in-flows from
investors but devaluing now would compound our already difficult situation and
investors will only wait in anticipation of a further devaluation. It will
rubbish our currency forever and strengthen the purchasing power of our trading
partners,” he said.
Lamenting further,
Ekeh said his company is one of the casualties of the current forex scarcity with
increasing difficulty to meet overseas business obligations, but believes
Nigerians and Nigerian corporates have reasonably adjusted to the realities of
the hard times with pains as most people are now prioritizing critical needs
which should be the case most times.
He stressed that the terrible
situation has most importantly impacted common sense which is not too common in
many Nigerians.
“It’s too late to
devalue the naira at this point in time. I can see reason behind the refusal of
the President to consider devaluation as it is a move that will certainly erode
the buying power of the middle class and push millions of Nigeria already
living below the poverty line into abject penury,” surmised Ekeh, who is also a
renowned Third World Economist.
“The country is
hugely dependent on imports as it were and with the status quo ante, any attempt to devalue the currency will only
usher in inflation and leave the country at the mercy of the vested interests
in the global economic set-up who have been voluble in their calls for
devaluation,” Ekeh said.
He advised that rather
than consider devaluing the currency, the President Muhammadu Buhari
administration should explore other options which will shore up the value of
the naira and make the country less dependent on imports as it used to be in
the past.
“We should rather
focus our collective energies on workable ideas and a sound framework on which
to base the diversification of our present mono-economy to re-ignite the
country’s hitherto-forgotten status as a continental exporter.
“This is the time to
refurbish our school system and save from remittance of fees for the millions
of Nigerians who do not have option than to school abroad. This is the time to
create knowledge incubators around the country which does not cost much to
empower Nigerians to create digital wealth which has near zero-incubation
period. It is the time for us develop industrial clusters in major productive
zones to supply the needs of Nigeria and reduce importation,” he posited.
Ekeh also predicted
that if oil prices rebound to at least $50 per barrel, the administration of
President Muhammadu Buhari will be one of the best placed in the history of the
country to positively impact the lives of Nigerians.
“Trust me, at $50 per
barrel the quality of life of today’s Nigerians may be better than when oil
prices reached record highs of $115 per barrel because Nigerians now have a new
mind-set to live real and well which wasn’t the case until few months ago. If the
prices inches to at least $50 per barrel, I am confident that the government of
President Muhammadu Buhari will be in a better position from a financial
stand-point to positively impact the lives of Nigerians and guarantee rapid
infrastructural development.
“This belief is drawn
from the new-found air of accountability and probity in the polity coupled with
the conscious effort to block leakages in the system which has strengthened the
country’s capacity and empowered most of our critical institutions,” he asserted.
+Remmy Nweke (ITRealms)
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Pix: Ekeh, Zinox chairman.
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