Catholic Bishops Conference of Nigeria
From: Diana Okon-Effiong, Calabar
As the Federal Government contemplates the devaluation of the Naira, the Catholic Bishops Conference of Nigeria has warned against such suggestions, saying that no responsible government would ever hand over its currency exclusively to market forces.
They spoke under the auspices of Caritas Nigeria and Justice Development and Peace Commission (JDPC).
The Bishops who spoke through a statement by the Executive Secretary of Caritas Nigeria and JDPC, Rev. Fr. Evaristus Bassey, stated that they were concerned over calls for further devaluation of the Naira.
“This has gathered momentum because of the critical voice of the Emir of Kano, former Central Bank Governor, Lamido Sanusi. This call has magnified the push by the IMF and other neo-liberal monetary institutions for the further devaluation of the Naira”.
“We wish to reiterate the fact that Economics is not a pure science like Chemistry or Physics with immutable formulas, and therefore Economists cannot lay claim to possessing the entire truth concerning the economy. The Economy is beyond economics. The Economy does not function irrespective of the politics of the land. There are therefore many other factors to be considered beyond the availability or not of foreign exchange.
“In our opinion, besides the Naira being actually undervalued, due to its present purchasing power parity, no responsible government hands over its currency exclusively to market forces. The policies enunciated by the Central Bank of Nigeria (CBN) to support the Naira may be excruciating in the short term, but in the long run, they help the economy.
“A situation had developed in which politicians no longer respected the Naira but were using dollars as the means of exchange. The dollarization of our economy has drastically reduced with the introduction of these measures. The Central Bank should however ensure that those who have genuine letters of credit be supported to meet their obligations so that we do not have a deepened and sustained loss of confidence in our economy”.
The Catholic group argued that, “the argument to devalue in order to attract investment is spurious and porous because the so called investments remain largely in financials not in the real sector and so find their ways out as soon as there are negative indications. Nigerians’ stock of liquidity is huge. Nigerian politicians should bring out all the money they have appropriated to themselves and invest in the real sector of the economy, so that Nigeria may experience genuine growth.
“In a non-export oriented economy like ours, we support the view of the Nigerian Labour Congress that calling for further devaluation of the Naira is totally unacceptable. China and Japan could devalue their currencies as many times as possible because they are export oriented economies. Our major export, oil, doesn’t need our currency to be devalued in order to increase demand for a product that is already experiencing glut in the market.
“Presently, while one could actually buy a plate of food in some places at 200 Naira, there is hardly anywhere in the world you could buy a meal with one dollar or one Euro. The present value is already low; if anything, it should be re-valued at 150 Naira to the dollar.
“The Central Bank should perhaps find ways to ease the flow of foreign currency into the formal sector of the economy without necessarily promoting the dollarization of the economy. Perhaps cash deposits from proven sources should be allowed to take place while there could be more restrictive withdrawals. CBN may also ease the transfer of foreign currency even if the funds came as cash deposits, if the purpose is for a proven genuine concern offshore”.
“Caritas Nigeria and JDPC calls on the Buhari administration to grow the economy through a strategic budgeting. Even if the government insists on going with zero budgeting as it has said, it must graduate back as soon as possible to a medium term expenditure framework, as this is a policy gain that should not be discarded as it ultimately benefits the economy by providing stability and direction in multiple years”.
admin
