…..blames persistent forex scarcity, crisis on political interference
A Professor of Financial Economy, Prof. Ndubisi Nwokoma, who is the Director of the Centre for Economic Policy Analysis and Research of the University of Lagos, has advised that the next Governor of the Central Bank of Nigeria, CBN, should explore workable avenues to maintain price stability in the country.
Prof. Nwokoma listed other areas that require urgent fixing for the Nigerian economy to progress well to include stable money supply, depreciating external reserve, forex allocation and Naira Design.
He was speaking today on Arise TV Morning Show.
According to him, Nigerians have been going through a lot due to high inflation , following inability of the CBN to come up with workable measure that ensure maintenance of price stability.
He pointed out that, “they are looking at what actually is the cause of inflation. It is caused by monetary variables or structure or their cost push inflation factor. So that’s an area that the governor will have to look at price stability, it is a function of the level of money supply; it has to be managed. So the governor will have to take a look at that.
“There are many factors of course, we have the issue of the exchange rate factor, and the issue about the production issues that actually begin to jack up inflation. So that is one core area the governor will have to look at to maintain monetary and price stability.
On Foreign Exchange, Professor Nwokoma noted that interference by political actors has always been the problem. He observed that a few individuals with the back up of the government collect virtually all the forex, leaving behind little or nothing for the larger majority, a situation he said has been the major reason for the persistent scarcity.
“As regards the use of foreign exchange, there’s so many questions about political interference. Big company will come and get so much allocation of foreign exchange. We have to look at minimizing political interference. That should never happen in any economy, there’s no way that won’t affect prices.
So, the CBN new governor has to look at that very critically .
To address the diminishing external reserves, he said ” With the whistle loads given out in secret and out of which we’ll be able to mortgage our reserves. There are a lot of issues that will have to be cleaned up.
“Then the other area is to look at the Naira design. Now we have the old currency operating side by side with the new currency. That is meant to end at the end of this year.