naira-notesVice President, Professor Yemi Osinbajo has argued that devaluation of the national currency will do the economy no good at this time.
This view is in agreement with an earlier sentiment expressed by President Muhammadu Buhari.
The Vice President said this yesterday while receiving ambassadors from Italy and Canada, Fulvio Rustico and Perry John Calderwood respectively in the State House, Abuja.
He said, “I don’t agree on devaluation… 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.”
According to him, “what we need to do is to start spending more on the economy and then things will ease up a bit.”
He outlined federal government’s plans to set-up a $25B 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.
The Vice President disclosed that already other sovereign wealth funds have indicated interest in the fund which would be used to address the nation’s decaying road, rail and power infrastructures. He said “this is our approach to speeding up the country’s infrastructural development.”
Prof. Osinbajo restated 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 is also to bring some stability to the country’s foreign reserves without which Foreign Direct Investment, FDI, might be affected.
He argued that FDI is more forward looking than portfolio investments which are being affected by the decision to manage the foreign exchange resources of the country at this time.
“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 affected by the current foreign exchange restrictions, especially those who have previous contracts and loan commitments.