Lagos — The Nigeria Labour Congress, NLC, Trade Union Congress of Nigeria, TUC, and the Nigeria Employers' Consultative Association, NECA, yesterday raised the alarm over the continued free fall of the naira, asking the Federal Government to take urgent steps to stabilize the national currency.
NLC specifically warned that in the absence of swift and tangible interventions, it might be compelled to take appropriate steps to compel relevant authorities to prioritise rescue of the naira, the economy, and ultimately, the entire nation.
While the TUC expressed regrets over the debilitating effects of the slide in naira value on workers, through inflation, NECA, which is the voice of business in the Nigeria, lamented that free fall of the naira was shutting down businesses in the country.
NLC in a statement, titled "Urgent action to stabilize the naira amidst alarming depreciation," President of NLC, Joe Ajaero, said: "The NLC expressed grave concern over the rapid and unprecedented devaluation of the Nigerian naira against major world currencies, particularly the United States Dollar.
"This alarming trend, if left unchecked, threatens to unleash a wave of devastating consequences on the Nigerian economy and its citizens.
"As a nation heavily reliant on imports, Nigeria is parti
cularly vulnerable to the adverse effects of a weakened currency. The Nigeria Labour Congress wishes to emphasize that the repercussions of this crisis will be felt acutely by workers and the masses, leading to an unbearable surge in inflation rates.
"The potential chaos and suffering that may ensue from such a scenario are quite frankly, unimaginable.
'Unbridled taste for foreign products'
"We are highly pained at the actions of many Nigerians, especiallypublic officials whose policies and actions ought to be unwaveringly patriotic and on the side of the economy and the people but who have sadly chosen to do otherwise.
"It is said that a dog does not eat the bone hung on its neck but our leaders have consistently devoured theirs to the detriment of the nation and in total breach of public trust and confidence.
"The unrestrained taste of our publicofficials for products manufactured outside the shores of Nigeria is grossly unpatriotic and lays our economy prostrate and our nation tottering on the brink of disaster.
"This penchant is one of the most contributory factors to the apparent high coefficient of imports which has had devastating effects on the value of the naira. It is unhealthy for public officials in various capacities to reward themselves with tools that are imported from outside our shores.
"Nigeria is fortunately currently blessed with local producers in certain sectors whose brands meet international standards and can, therefore, meet the demands of certain products for public service in the country.
"We are, therefore, surprised that rather than patronize these brands, our public officials insist on the use of foreign products yet, we want the value of the naira to remain robust in the foreign exchange market.
"The simple maxim is that, you cannot have your cake and eat it. It is either we put our food where our mouth is or we end up destroying our economy with our hands.
'Public officials de-marketing Naira'
"This action of our public officials de-markets the naira and is one of the most dangerous factors sounding the death knell of the local currency. We, therefore, call on all Nigerian public officials to be more patriotic in their choices and favour locally manufactured goods.
"The positive multipliers created by patronizing locally manufactured goods is huge and is capable of jump-starting the critical sectors of the nation's economy but our refusal to do that has left the naira wobbling.
"Every money spent on buying foreign made goods creates jobs outside the country to the detriment of our labour market and puts pressure on the naira.
"However, every amount spent on purchasing locally manufactured goods, creates jobs in Nigeria, thus increasing employment, elevating income, reducing poverty and much more reducing the pressure on the naira as it encourages local manufacturers to increase production, raise their standards and create better chances for export.
"The Nigeria Labour Congress, hereby, calls upon the custodians of our economy to recognize the gravity of the situation and take immediate and decisive action to halt this uncontrolled depreciation of the naira.
"We implore the monetary authorities to implement effective measures to safeguard the naira, stabilize the economy, and secure the future of our beloved nation.
"All nations of the world take pride in protecting their domestic currencies from all manner of threats but the reverse seems to be the case in Nigeria. Why a country with high import coefficient and a less than one elasticity of exports would allow its local currency to be at the mercy of the vagaries of the so-called market forces leaves us surprised and deeply worried.
"This is despite all the wise counsel, warning against the consequences of such actions. It is only an economy with a vibrant and robust domestic manufacturing capacity that is export-oriented that will respond quickly and effectively to a free-falling local currency, not one like ours that is steeply bogged down by supply inertia and unable to meet domestic demands competitively, let alone responding positively and taking advantage of the falling naira.
"We need to deliberately protect the naira by buying locally manufactured goods, especially those used by public office holders. We still remember when the Peugeot and VW brands were used as official vehicles in the public sector and that made a lot of sense.
"We insist that we return to the idea of using only locally made vehicles for public officials in Nigeria. Any person in public office whose taste has become exogenously determined should satisfy that through his own purse and not the public treasury.
"In the absence of swift and tangible interventions, the Nigeria Labour Congress may find itself compelled to take appropriate steps to compel the relevant authorities to prioritize the rescue of the Naira, the economy, and ultimately, the entire nation.
"We stand ready to engage constructively with all stakeholders in pursuit of a lasting solution to this pressing issue. Together, we can and must ensure the stability and prosperity of our great nation. The naira must be saved if we are to make progress."
TUC blames IMF, World Bank
Speaking in a similar vein, the Deputy President of TUC, Dr Tommy Okon, said: "The continued free fall of the naira against other currencies is nothing but plot by the International Monetary Fund, IMF, and the World Bank to continuously impoverish Nigerians.
"They stylishly manipulate our leaders to believe that they mean well for our country whereas it is for their selfish economic gains.
"It is sad that instead of encouraging our indigenous industries to be productive, the Central Bank of Nigeria, CBN, decided to lift the ban on the 43 items restricted from accessing foreign exchange to boost liquidity in the foreign exchange market.
"As we speak, most of our local industries can no longer cope because of importation of goods to weaken local industries.
"You are aware of the effort of the previous government to boost our local industries. For instance, the rice mills and our local rice were competing well in the market which were exported to boost foreign exchange market but today, most industries would prefer importing rice to milling because it could be cost-effective.
"On the part of workers and the masses, it is a sorry situation because virtually everything has skyrocketed by inflation. The workers are the worst hit because of the fixed salary and income, and there is nothing tangible to cushion the effect of the free fall of the naira against other currencies.
"Our leaders should strengthen our local industries and make them more productive and stop depending on the IMF and World Bank for economic recovery."
Free fall of naira worrisome -NECA
On his part, the Director-General of NECA, Adewale Smatt-Oyerinde, said: "The free fall of the naira against other currencies is quite worrisome. It is a huge concern for organized businesses as it directly affects the cost of doing business.
"It is instructive to note that many organizations still source their materials and machinery from overseas, using dollars as the means of trade.
"As the value of the naira plummets, the cost of buying these inputs also increases, with consequential effect on the ability of the business to create wealth, address welfare issues and create jobs.
"We urge the Federal Government to hasten implementation of the various interventions promised organized businesses and the urgent implementation of the Reports of the Taiwo Oyedele-led Presidential Committee on Fiscal and Tax Reforms."
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Manufacturers should be less import dependent to overcome FX liquidity - Adonri
Also reacting to the issue yesterday, Analyst and Executive Vice Chairman at HIGHCAP Securities Limited, David Adonri, said: "The foreign exchange market is now deregulated. So, the forces of supply and demand are expected to dictate value of the naira.
''Foreign currencies are not created here in Nigeria.
They have to flow in as capital inflow, export proceeds and diaspora remittance. If these sources are under-supplying or demand remains high, the equilibrium price that satisfies demand will be established.
"The alarm raised by NLC, TUC and NECA is meaningless. What they should do is to tell their members to be less import-dependent and increase their capacities to earn in hard currency.
"The previous policy of government in subsidizing forex even with borrowed funds is what led us to the penury of today. Government has no business in defending the Naira for any reason.
"Government should be a participant in the forex market like every other economic element, selling when it needs Naira and buying when it needs hard currency at the open market rate.
"If market mechanism is allowed to allocate forex, sooner or later, the volatility in price will reduce after market correction is complete. Let NLC and others know that the value of Naira is only adjusting to market reality and that the market is in dynamic equilibrium."
I expect govt to be up and doing in resolving challenge of FX liquidity - Olayinka
Commenting also, Tajudeen Olayinka, Analyst and CEO, Wyoming Capital and Partners, said: " It does not change the story that is already known in the public domain, it only goes to show difficulties the economy will continue to experience around inflation, unemployment and growth, as producers of goods and services continue to re-price their earning assets to recover cost and reduce losses to the extent the economy can absorb their actions. I expect government to be up and doing in resolving the challenge of FX liquidity, now that they are done with litigation."
