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FG Will Not Devalue Naira, Says Osinbajo
Following growing call for it to take action, the federal government on Thursday announced that it will not devalue the naira, despite the instability rocking the nation’s economy.
Vice President Yemi Osinbajo who made this position known in Abuja when he received the Italian Ambassador Fulvio Rustico, and Canadian High Commissioner, Perry Calderwood, in his office, insisted that the devaluation of naira was not an appropriate option, adding that it was not healthy for the country’s current 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 N224 in the parallel market.
Recently, the Africa Director of International Monetary Fund, IMF, Antoinette Sayeh, urged the CBN to review 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 CBN’s policy, describing it as detrimental to ordinary Nigerians and asked for the review of the CBN’s order stopping the importation of 41 items.
But Osinbajo reiterated President Muhammadu Buhari’s stands on devaluation of the Naira, saying that what the government needs to do “is to start spending more on the economy” adding that “then, things will ease up a bit.”
He explained that plans are in place to obtain a $25billion Infrastructural Fund from local and international sources, including the 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.
Osibajo said that government’s currency 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.
He said that the government is collaborating with the CBN to ensure that legitimate businesses, especially previous contracts and loan commitments, do not suffer unduly.