Naira Devaluation Not In Our Plans—Presidency
Sequel to the unending clamor for Devaluation of Naira by some Governors and private investors in the country, the Senior Special Assistant on Economic Matters to the Vice President, Mr. Ayoleke Adu has affirmed that the Presidency has no plans whatsoever to devalue Naira but shall provide enabling environment for interested investors.
In an interactive session with 'Ekiti Youth Arise', an online platform of professional Ekiti Youths and various Youth groups, Adu spoke extensively on Devaluation of Naira, Forex, Economic Policies of the Buhari government, the Bailout Funds to States, Empowerment Opportunities for Youths, among others, concluded that Nigeria is 'infrastructure-broke'.
Adu said the Ekiti State Governor, Mr. Ayo Fayose was wrong to have said the bail out was a fraud by the Buhari government when asked if Ekiti State benefitted from the bailout and was said to be a fraud because the Local Government didn't benefit from the Federal Government Loan.
"There is no fraud to it. I think it is mix-up in terminology by His Excellency the Ekiti Governor. If you had a loan of 2years tenure and the tenure is extended to about 20yrs at lower rates and with FGN now guaranteeing on your behalf; you should know you will have a lot more cash flow because you won't be paying as highly as you would have paid on a monthly basis before the loan was restructured.
"Has His Excellency said Ekiti didn't benefit? If it hasn't then he knows what to do to get his bilateral loans restructured and nobody else can apply for the state other than the state. I doubt if Ekiti has not benefited because it would be highly upsetting if the state hasn't taken the right steps to do so.
"It is the State Government that should ensure it flows down the loan to the Local Government, pensioners, etc. if it didn't flow down, it is for the state assembly and the people to ask the right questions."
Adu assured Ekiti Youths in Enterprises and Entrepreneurship that the Buhari government have some plans to encourage MSMEs even though there is "no full Empowerment anywhere in the world".
"There is no better way to support start-ups or MSMEs than through provision of adequate infrastructure that would support them. Power and transportation being the most critical. In addition, there are many specific initiative in the pipelines to support MSMEs operating in critical sectors like Agriculture and Agro-allied industries.
"The school feeding program has a huge multiplier effect on domestic Agric in any state that adopts it because you can't carry eggs from Lagos to Ekiti it won't work logistically. You will have to grow the poultry that would provide the eggs in the vicinity. The provision of a steady and reliable market as such is a major stimuli for any start-up in that field
"We are planning technology parks and industrial parks also. I hope you understand the benefits of technology parks just like they have in India.
"To be frank, I do not see why British Airways can't have their global call center located somewhere in Ekiti. Currently, if you call most of these big multinationals you will think the call is being answered from London; but in reality it is being answered from a technology park in India. It is those kind of things I'm talking about. But you must have adequate power supply and bandwidth to such centers."
The Senior Aide in the Presidency gave his best assurances that Ekiti would benefit immensely from the Buhari government even though her policies experience daily criticisms by the unrepentant critic-governor of the State.
"The very unfortunate things is that you need a very FIRM handshake between the federal and state governments for you to have the best flow of empowerment programmes. Unfortunately that doesn't exist now in Ekiti, but I pray we all see the sense in helping and assisting our people. You can imagine the level of multiplier effect the school feeding would have in Ekiti tomorrow if the State Govt signals that it is ready just like other states have done.
"That aside, there other programs whose implementation would start once the budget is passed. Ekiti would surely get its shares no matter what it takes.
"Please hold me 101% to that. Ekiti would get its own share; by the grace of God Almighty.
"There is no where in the world where there is full employment. What I've said is that Ekiti would get its share by God's grace and I will work assiduously towards it."
Educating the platform extensively on the effects of Devaluation of Naira on the Nigerian economy, the financial expert said
"You've heard it from Mr. President that the Naira would not be devalued. If I start talking on this topic we might not leave here for the next 1hour. There are advantages and disadvantages to devaluation and each country must measure what benefits it would have for it. For Nigeria, as we speak, the disadvantages far outweigh the advantages both in the short and long run. We do NOT yet have the infra that can make us export-competitive, which is about the only major advantage of devaluation. If we devalue, we would have imported inflation, labour unrest because the NLC would ask for wage increases and this would lead to lose of productivity, etc.
"The truth is that we must be very truthful to ourselves. Nobody will develop our country for us, except ourselves. There are major components of our infrastructure needs that are domicile in USD, so if you devalue, you also would have to adjust the contract prices upwards.
He said the Buhari-led government was on the right track, "What we need to do is what we are doing. People that want to import all sorts of "junk" things into our economy and things that can be produced in Nigeria should go and source for their Forex to do so. We would focus our FX on what will make our economy grow and the need for critical infrastructure."
Expressing his dissatisfaction on the importation of some goods that could be produced into the country, asking that
"Can you imagine people complaining they can't find fx to import potatoes into Nigeria?? Can't potatoes grow in Ekiti or Jos or elsewhere in Nigeria? I've been to supermarkets in Lagos and seen eggs imported from South Africa. Yes eggs!!!
"So you see the problem we have caused for ourselves over the years. These are the things we inherited and these things must be cured. just to let you know that there is NO empirical evidence to support the insinuation that devaluation would lead to more companies establishing in Nigeria. However, we've seen that the per capita import in US$ terms increases after each devaluation in Nigeria. Even the portfolio investors that would normally be expected to bring in "hot" money would only create a worse thing for the economy. For example, say an investor brings in $1m to buy FBNH shares at say N3.50; when they all do this, the shares of FBNH and other assets in the country rises. They then sell their FBNH at say N5.00. They have made a portfolio gain of 42%. When they take out their money how much will they take out from the CBN? It's not the original $1m but the $1.42m which would further worsen/deplete the FX reserves. That is the simple truth. Go and check the fund flow pattern and the growth pattern of the NSE stocks after every devaluation in Nigeria."
You would recall that pro-buhari advocates during the Presidential campaigns said Mr. Buhari when elected would equate a dollar to a Naira, the Senior Special Assistant when asked if the promise is still achievable or a mirage, Adu said "any country can structure or recalibrate it's currency to any value versus the dollar at any time. Go and google what Ghana did recently. It all depends on your strategy and what you want to achieve. It is the advantages/disadvantages you have to weigh."
Adu, who was on the Presidential Economic Team to Qatar said the government would unveil her detailed economic policy soonest
"Yes we have economic policy in place. With focus on rapid development of critical infrastructure, stability of the financial system, single digit inflation rate, low interest rates, etc. A more detailed doc is being worked on that would be for public consumption and it would map things out year after year and sector by sector."
He concluded in difference to the public perception that Nigeria is 'broke' saying "Nigeria is NOT broke. But infrastructure wise and due to lack of investment by many previous Govt in infrastructure; you may say we are "infrastructure-broke" and we all know this. This is the reason the President and his Vice and the ministers and aides are all focusing on delivering on these infrastructure projects."
The convener of the online Youth platform, Adeolu Oyebode, appreciated the guest speaker for detailing the Buhari-led government economic policies, and advised the Senior Special Assistant to also protect the interest of Ekiti State and her youths in National policy formulation and Implementation.
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