Former Governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo, on Monday called on the Central Bank of Nigeria, CBN to eliminate the multiple exchange rates regime and reduce the wide spread between the official and parallel market exchange rates.
Soludo who was the Chairman of the Economic Discourse organised by the Institute of Chartered Accountants of Nigeria, made this call Lagos while fielding questions from journalists after the event.
According to him, to return the country out of the biting economic challenges and get back on the path of growth, Nigeria must get out of multiple exchange rates and we must eliminate the premium, get it back on track at a competitive exchange rate regime.
Soludo commended steps taken by the CBN in the last few weeks to restructure the foreign exchange market, but stressed that there was still a long way to go to get the economic back on track.
He said “With regards to exchange rate, I can see quite some changes in the last few weeks. I think some steps are beginning to be taken, but it is still quite a long way to go to get to a stable and predictable level that eliminates the premium among the multiplicity of exchange rates.
“Nigeria must get out of multiple exchange rates and we must eliminate the premium, get it back on track at a competitive exchange rate regime. The uncertainty that is created by that is so enormous; and with the oil price rising and with the increase in oil earnings, this is the time to take bold steps and do the needful.”
On how policymakers can eliminate the multiple exchange rates and close the gap, Soludo said it was simple because the nation had done it before.
He said, “On bold steps, the template is not too far. We have done it before and it is just going back to it. If it (the template) is not broken, why mend it? Get back and eliminate the multiple exchange rate regime, eliminate the premium, or at least significantly reduce it to not more than between three to maximum of five per cent premium between the parallel and official exchange rates.
“On what it takes to do it, that is basically known. Get the public finance okay; I can tell you that with the momentum of what is going on in the rest of the world, by the end of this year, we should actually be having stocks of reserves in the range of about $50bn or $60bn.”
According to Soludo, getting the country out of the current economic recession is no big deal as bringing it back to growth.
He said in spite of government policies, the country would come out of the current recession.
He stated, “And getting Nigeria structured and reengineered towards non-oil economy, that again will require a lot more serious work. The recession is not the issue. We will get out of it in spite of government policy.
“I think this is a time Nigeria should actually be making hard decisions to transit away from an oil revenue economy. And that’s the serious work.”
