23 May 2017

Nigeria: 'Make Naira Convertible International Currency'

A former Deputy Governor of the Central Bank Of Nigeria (CBN), Dr. Obadiah Mailafia, has called on the Federal Government to take measures that will make naira convertible international trading currency.

Mailafia made the call in an interview with the News Agency of Nigeria (NAN) in Abuja yesterday. He recalled that about 40 years ago, naira was accepted abroad for trading and other purposes. "In the 70s, Nigerians were spending naira in London. It was accepted.

"The situation has changed that even in Benin Republic, they don't accept naira. "We need to restore the purchasing power, the honour and dignity of the naira as our proud currency and the symbol of national honour," he said.

Mailafia, therefore, urged the government to begin the efforts that would shore up the value of the currency so that it could be acceptable internationally in the next decade.

In strengthening the naira, he said vigilance should be exercised not to allow fake currencies, including the naira, to enter the country. According to him, monetary authorities in the country need to be more vigilant because there is a law of finance that says bad money always chases away good money.

"It is like a computer virus, you put one virus, it can wipe off all good data you have and this is what happens with fake currency. "Once it enters the system, it begins to infect the whole monetary and financial system."

In addition, Mailafia advised that the CBN should earn the trust of Nigerians by being transparent the way it operated foreign exchange market. "The CBN should be transparent on its implementation of monetary policies and the way it supervises commercial banks.

"This will catalyse commercial banks to do what they are expected to do to restore this economy," he said. He further said that restoring the naira also meant to diversify the economy and diversify the country's export base.

"When you do that and diversify the sources of revenue and income, it eases pressure on domestic currency so it will continue to be strong." On foreign exchange policy, the former CBN boss said that some analysts had advised the government to change the new policy in order not to deplete the country's external reserve.

Dutch option is a public offering auction structure in which the price of the offering is set after taking in all bids and determining the highest price at which the total offering can be sold.

In the type of auction, investors place a bid for the amount they are willing to buy in terms of quantity and price. Mailafia has also advised the Federal Government to invest massively in infrastructure as a way of providing jobs to tackle unemployment in the country.

He said the government should expand the economy to enhance productivity and growth. "We need to enhance productivity because that will generate opportunities and expand the capital base of the economy.

"Also, in our technology choices, we should invest in pattern that will enhance job creation instead of relying on capital intensive technology, let us invest in labour intensive technology"

Mailafia, quoting the latest statistics from the National Bureau of Statistics (NBS), which put unemployment at 13.9 per cent, expressed concern over the unemployment figures, noting that they "are frightening and it is a time bomb; we have to be able to create job opportunities for them.

"The 45.65 per cent unemployment figures is for people from ages of 16-35, this is almost half of the population because the youth are the majority in this country.

"Anybody over 40 years in Nigeria is a minority because the country has a very youthful population and nobody is planning for these youth," he said. He expressed concern over the unemployment figures, noting that they "are frightening and it is a time bomb; we have to be able to create job opportunities for them.

"Otherwise, they are going to use the energy they have in a destructive manner and that is not good enough." He said one of the blind aspect in the country's National Development was that the government don't have a programme for the young people.

Mailafia emphasised on the need to include the age group in the development plan and come up with programmes that would gainfully engage them. "I have always had big burden, there are young people with first class honours who are wondering around without employment.

"The available job in the country is not distributed according to merit. Merit has been thrown to the dustbin, he said." He, however, expressed faith that the country would come out of its present economic challenges.



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