Zinox advises Buhari on naira devaluation
Indigenous integrated Information Communication Technology (ICT) conglomerate, Zinox Group, has advised President Muhammadu Buhari to resist the push for the naira's devaluation.
To its Chairman, Leo Stan Ekeh, it is too late to further tinker with the value of the naira. The prevailing fiscal and monetary framework aligns with developments in the global oil market, thus making devaluation unnecessary now, he said.
Ekeh said since the beginning of the year, the country has been facing reduced government earnings from the sale of crude oil because of the dip in prices at the international market, stressing that the development had prompted the Central Bank of Nigeria (CBN) to impose strict foreign exchange (forex) rules to save its reserves while battling the pressure from various quarters to devalue the naira.
Speaking on the sideline of a reception organised to mark his 60th birthday at Lagos Sheraton Hotel, Ikeja, Stan-Ekeh said it was too late to devalue the naira as the move will only serve to further impoverish the masses and plunge the country into hyper-inflation.
He said: 'If devaluation happened mid-last year, it would have made sense and encouraged in-flows from investors but devaluing now would compound our already difficult situation and investors will only wait in anticipation of a further devaluation. It will rubbish our currency forever and strengthen the purchasing power of our trading partners.
'If the government devalues the naira now, what do you think would happen to the already stretched wage earners? Would their salaries be adjusted to take care of inflation as is the standard globally? As I speak right now, a lot of states cannot pay the minimum wage and still owing workers their monthly salary.'
The Zinox chief who lamented that his firm, like many other players in the economy, affected bythe forex scarcity because it has become increasingly difficult to meet foreign business commitments, said individuals and firms in the country have since adjusted to the realities of the hard times which he said has taught people to prioritise critical needs.
He said: 'It's too late to devalue the naira now. I can see reason why President Buhari refused to consider devaluation. It is a move that will certainly erode the buying power of the middle class and push millions of Nigeria already living below the poverty line into abject penury.
'The country is hugely dependent on imports as it were and with the status quo ante, any attempt to devalue the currency will only usher in inflation and leave the country at the mercy of the vested interests in the global economic set-up. They have been voluble and strident in their calls for devaluation.'
Ekeh advised Buhari to explore other options to shore up the value of the naira and make the country less dependent on imports as it used to be in the past. 'We should rather focus our collective energies on workable ideas and a sound framework on which to base the diversification of our present mono-economy to re-ignite the country's long forgotten status as a continental exporter.
'Again, this is the time to refurbish our school system and save forex from fees for the millions of Nigerians who do not have option than to school abroad. This is the time to create knowledge incubators around the country.
''This does not cost much as it will empower Nigerians to create digital wealth which has near zero-incubation period. It is the time to develop industrial clusters in major productive zones to supply the needs of Nigeria and reduce importation,' he said.
Ekeh also predicted that if oil prices rebound to at least $50 per barrel, President Buhari will be one of the best placed in the history of the country to positively impact the lives of Nigerians.
'At $50 per barrel, the quality of life of Nigerians today may be better than when oil prices reached record highs of $115 per barrel because Nigerians now have a new mind-set to live real and well which wasn't the case until few months ago. If the prices inches to at least $50 per barrel, I am confident that President Buhari will be in a better position from a financial stand-point to positively impact the lives of Nigerians and guarantee rapid infrastructural development', he said.