Osinbajo: Naira Won’t Be Devalued

Prof-OsinbajoThe Federal Government on Thursday again ruled out the possibility of devaluing the nation’s currency, saying it was not an appropriate option in the current economic realities.

Vice President Yemi Osinbajo reiterated the government’s position while receiving the Italian Ambassador in Nigeria, Mr. Fulvio Rustico; and the Canadian High Commissioner in Nigeria, Mr. Perry Calderwood, at the Presidential Villa, Abuja.

According to a statement by his Senior Special Assistant on Media and Publicity, Mr. Laolu Akande, the Vice President told his guests behind closed-doors that devaluation of the naira would offer no solution to any of the country’s economic problems.

Osinbajo was quoted as further saying that the devaluation of the naira would not help the nation’s economy.

Instead of devaluing the naira, the Vice President said the nation must begin to start spending more on the economy.

He said, “I don’t agree on devaluation and it is not that I am doctrinaire about it. In the first place, it is not a solution; we are not exporting significantly. And the way things are, devaluation will not help the local economy.

“What we need to do is to start spending more on the economy and then things will ease up a bit.”

According to the vice president, the issues around the economy are no exact sciences, and that what is important is to be reasonably flexible in dealing with them.

He cited the Federal Government’s plans to set up a $25bn Infrastructural Fund, which would be sourced from local and international sources including the Nigeria Sovereign Wealth Fund and the pension fund.

Osinbajo said already, other sovereign wealth funds had indicated interest in the fund, which would be used to address the nation’s decaying road, rail and power infrastructures.

That step, he said, was the country’s approach to speeding up the infrastructural development.

He also explained that the current foreign exchange restriction was a temporary measure to avoid depleting the country’s forex substantially at a time when the prices of oil in the international market was dropping.

The restriction, he added, was to bring some stability to the country’s foreign reserves without which Foreign Direct Investment might be affected.

The Vice President said the FDI was more forward-looking than portfolio investments being affected by the decision to manage the foreign exchange resources of the country at this time.

“I am not sure devaluation is the issue, but how to ensure Foreign Direct Investment, which is more useful,” Osinbajo said, adding that he expected more stability and direction in the next few months.

He said the Federal Government would work with the Central Bank of Nigeria to ensure that legitimate businesses were not badly impacted by the current foreign exchange restrictions, especially those with contracts and loan commitments.

The vice president expressed the appreciation of the Federal Government to both envoys on behalf of Buhari and looked forward to closer and deeper ties between Nigeria and their countries.

A delegation of top executives from Citigroup led by Mr. Jim Cowles also paid a courtesy call on the Vice President On Thursday.

It will be recalled that a former CBN Governor, Lamido Sanusi, had on Friday called on the central bank to devalue the naira and loosen monetary policy to stimulate the economy, hit by a plunge in oil prices.

The CBN Governor, Mr. Godwin Emefiele, has however, ruled out another naira devaluation, saying repeatedly that the currency was “approximately” priced despite a sharp fall of oil revenues whacking public funds.

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