Nigeria’s Vice President, Professor Yemi Osinbajo, has said that devaluation of the Naira is not an appropriate option in the current economic realities in the country and offers no solutions as far as the Buhari administration is concerned.
According to a statement by the Senior Special Assistant – Media and Publicity to the Vice President, Laolu Akande, President Muhammadu Buhari had earlier expressed his views that a further devaluation of the Nigerian currency is not healthy for the Nigerian economy.
The Vice President received the Italian Ambassador in Nigeria, Mr. Fulvio Rustico and the Canadian High Commissioner in Nigeria Mr Perry John Calderwood in his office on Thursday and spoke in a similar vein about the Naira.
“I don’t agree with 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,” he said.
He observed that the issues around the Nigerian economy required reasonable flexibility in dealing with them.
The Vice President outlined the Federal Government’s plans to set up a $25 billion infrastructural fund which would be sourced from local and international sources including through Nigeria’s Sovereign Wealth Fund and also the pension fund among others.
He disclosed that the fund would be used to address the nation’s decaying road, rail and power infrastructures.
“This is our approach to speeding up the country’s infrastructural development,” he added.
Foreign Exchange Restriction
Professor Osinbajo also stated that the current foreign exchange restriction is a temporary measure to ensure that “we don’t deplete our foreign exchange substantially at a time when the prices of oil in the international market is dropping”.
He added that the restriction would also bring some stability to the country’s foreign reserves without which Foreign Direct Investment, FDI, might be affected.
In his reckoning, FDI is more forward looking than portfolio investments which is being affected by the decision to manage the foreign exchange resources of the country.
“I am not sure devaluation is the issue, but how to ensure foreign direct investment which is more useful,” the Vice President noted, adding that he expects a bit more stability and direction in the next few months.
He disclosed that the Federal Government would work with the Central Bank of Nigeria to ensure that legitimate businesses are not badly impacted by the current foreign exchange restrictions, especially those who have previous contracts and loan commitments.
He expressed the appreciation of the Federal Government to both envoys on behalf of President Buhari and also said that he looked forward to closer and deeper ties between Nigeria and the two countries.
A delegation of top executives from Citigroup led by Mr. Jim Cowles also paid a courtesy call on the Vice President earlier on Thursday.
Nigeria’s oil revenue drops further, as N389.9 bn is shared
Nigeria’s earnings from crude oil exports continued to decline in September, as the three tiers of government shared only N389.936 billion for the month.
Apart from May and June, when the country earned revenues higher than preceding months, statutory earnings have been on the decline since July.
In July, the country’s revenue dropped by N52.4 billion; N64.36 billion in August; and N47.14 billion in September.
The Permanent Secretary, Federal Ministry of Finance, Anastasia Daniel-Nwaobia, said at the end of the meeting of the Federation Accounts Allocation, FAAC, that gross statutory revenue for September stood at N328.326 billion.
The decline in revenue for the month was attributed to the negative impact of shut down and shut-in of oil production in various terminals in the Niger Delta for maintenance and repairs.
Specifically, the country lost about $32.07 million during the month as a result of the drop in average crude oil price from $56.76 per barrel in July to about $47.32 in August.
The Permanent Secretary said the balance in the Excess Crude Account, ECA, as at October 28 remained at about $2.256 billion.
“No excess money has been added to the account as the country has not made any excess revenue from the sale of her crude oil,” she explained.