The Managing Director and Chief Executive Officer of Cowry Asset Management Limited, Mr. Johnson Chukwu has cleared the Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala and the Governor of Central Bank of Nigeria (CBNC), Mr. Godwin Emefiele of any blame in the present dwindling of the nation’s exchange rate.
Chukwu who spoke in an interview with Primetime Reporters in Lagos recently stated that under the present circumstances, there was not much anybody could have done differently other than what had been done so far.
While admitting that some policy issues brought about by the CBN may have institute the panic in the foreign exchange market, he added that anybody who was on that position would have taken the same broad policy measures that the Minister had taken on the issue of devaluation.
According to him,” I think anybody saying that the economic managers were incompetent in managing the economy of this nation does not understand economic issues. Granted that I will concede to them that some panic measure that were taken by the Central bank between December and now may have created a lot of uncertainty in the foreign exchange market and may have worsened the state of flight safety and those who are forth loading their demands from the foreign exchange”.
“But I don’t see what anybody could have done differently from what the Minister had done in terms of managing the exchange rate. The fact is this, 90 percent of our foreign exchange comes from a single product, that product may have dropped by about 60 percent and it is not as if we have a huge buffer like the Saudi Arabia. Our reserve when this happened was in the neighbourhood of 34 billion dollars”.
“So, I wouldn’t know what anybody would have done differently other than to devalue. Like I said, some policy issues that were brought about by the Central Bank may have instituted the panic but basically, anybody who is in that position would have taken the same broad policy measures that the Minister has taken on the issue of devaluation”.
While contending that devaluation in itself was not bad even though it punishes those on a fixed income, Chukwu averred that for a huge economy like Nigeria, the exchange rate could be used as a tool to encourage production adding that when you have a weak currency, it would encourage others to import your goods.
He maintained that,” even if you do not have goods to export, it would have discouraged your people from importing goods. I have seen in this country where devaluation happened under the Babangida’s government, we saw Nigerians look inwards. That was when the Nigerian fashion industries came up as a response to the devaluation of naira in the 1980s because it became more expensive to import foreign made wears”.
“Today, a lot of Nigerians are adorned in Nigeria made designs. So, there are several areas we can take it one step at a time, identify those area that do not require a lot of energy to produce, like I mentioned the textile industry. We now have a vibrant music industry, it does not require too much of power to produce, you have the film industry. So, you have a vibrant entertainment industry”.
On what Nigerians could do to assist in securing the nation’s exchange rate, Chukwu said,” the basic thing about the action the populace can take is to consume made in Nigeria goods. We need to de-emphasize our appetite for imported goods and look more inwards. So, it is a matter of orientation, Nigerians should look more inwards in their consumption pattern”.
