Leadership (Abuja)
Stanley Yakubu And Andrew Oota
17 December 2008
Abuja — Despite the mounting anxiety across the land over the continuous depreciation of the value of the Naira, the economic team of President Umaru Musa Yar'Adua, yesterday for the umpteenth time re-assured Nigerians that there was no cause for panic.
Spokesman for the team and governor of the Central Bank of Nigeria Professor Chukwuma Soludo who gave explanations before the Senate yesterday declared that though the Nigeria economy is feeling the adverse effects if the global economic crisis, there was nothing to worry about.
But majority members of the Senate appeared not convinced with the repeated assurances, as one after another they expressed their fear for the common man.
Worried by the efforts of the depreciating value of the Naira amongst citizens of the country, the senate had last week summoned the entire presidential economic team headed by finanace minister Dr. Usman Shamsedeen to appear before to explain what exactly the problem was.
Led by Dr. Shamsedeen, the team, which included the Chief Economic Adviser Dr. Yakubu Tanimu Kurfi and the Director of Budget Dr. Okongwu, the financial experts were ushered into the Senate chambers at exactly 12.20Pm.
The CBN governor, professor Soludo, who spoke on behalf of others, took time to explain what has led to the depreciation of Naira, saying it was nothing unique and strange, pointing out it was simply a reaction to global economic meltdown.
He explained that the last time they were invited to the Senate, even after reassuring that, there was no cause for worry, they did state clearly that Nigeria's economy will certainly experience the effects of the economic meltdown , as the country is not living in isolation.
"We had stated very clearly that though Nigerians economy was certainly going to experience crisis, but we had assured that the Nigeria banking system was robust enough to stand the global crisis and I want to still restate here that our banking system is robust enough to stand the test of time.
" the global economic shocks we are today experiencing, I must say, are partly due to the declining oil prices which could put pressure on the exchange rate And the foreign reserve", soludo stated.
He cited Algeria as example of African country whose foreign reserves has hit 140 Billion mark and the largest in the continent, but which is also experiencing the effects of the global crisis.
Insisting the country was not experiencing financial crisis, the CBN governor recalled that " in 1981 or there about, Nigeria experienced a similar global economic meltdown that forced the then administration of president Shehu Shagari to introduce stiff economic measure fondly called Austerity measure.
And rather than embarked on hasten economic measures as a response, Soludo suggested that, " We adopt a delayed response in order to allow the prices of oil to adjust gradually and systematically, and leave the Naira rate as it is for the factors of demand and supply to take control."
He revealed the situation is gradually and systematically getting better, pointing out that, "only last week there was one day which the CBN was forced to pumped in $1.4 Billion even when the exchange rate was high as 137 naira to a dollar.
"They wanted it and they were willing to buy as high as that. So, who will not sell if there are those who are ready to but it at that cost"
"But now, I can tell you that demand has dropped, today the demand for $72Million at less than 135 Naira to the dollar, and this is showing a steady.
While further assuring that the CBN will continue to take every measure necessary in order to ensure the safety of the banking sector, Soludo disclosed that as from next year"CBN will deploy its staff to all the commercial banks in the country to work closely with them in order to ensure on-the-spot monitoring and evaluation" as part of the measures to safeguard the sector from collapse.
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