The Federal government on Thursday announced it will not devalue naira despite the instability rocking the nation’s economy following growing calls from some experts for further devaluation of the currency.
Nigeria’s Vice President Yemi Osinbajo who stated this in Abuja when received Italian Ambassador Fulvio Rustico, and Canadian High Commissioner, Perry Calderwood, insists the devaluation of naira was not an appropriate option, saying it was not healthy for the current country’s economy realities.
In November last year, the Central Bank of Nigeria, CBN, devalued the Naira, initially from N155 to N168 to the dollar, and later to the current N198 to the dollar, but the rate goes for as high as N222 in the parallel market.
Earlier, The Africa Director of International Monetary Fund, IMF, Antoinette Sayeh, urged the CBN to calling for a review of the restrictions to “permit the exchange rate to continue to adjust”, a strategy adopted to strengthen the Naira as global oil price remains unstable.
Sayeh criticized the Central Bank of Nigeria’s policy, describing it as detrimental to ordinary Nigerians, and askedd for the review of the CBN’s order stopping the importation of 41 items.
But Osinbajo reiterated the President Muhammadu Buhari’s stands on devaluation of the Naira, saying, “What we need to do is to start spending more on the economy and then things will ease up a bit.”
He explained plans are in place to for a $25billion Infrastructural Fund from local and international sources, including through the country’s Sovereign Wealth Fund, SWF, and the pension fund, among others.
The vice president also said that other sovereign wealth funds have indicated interest in the Fund to help address the nation’s decaying roads, rail and power infrastructure.
He noted that the decision of the government’s policy will bring stability, insisting the current foreign exchange restriction by the CBN was a temporary measure to forestall the substantial depletion of the country’s foreign reserves.
Osinbajo said government is making collaborative efforts with the CBN to ensure that legitimate businesses, especially previous contracts and loan commitments, saying that, “The way things are, devaluation will not help the local economy.”