Bank CEOs advocate further devaluation of the naira

FELIX OLOYEDE

Some Chief Executives of commercial lenders have proffered solutions to the country’s troubled foreign exchange market, which is a further devaluation of the naira.

The Group Managing Director, First Bank of Nigeria Limited, Mr. Bisi Onasanya, Group Managing Director, Zenith Bank, Mr. Peter Amangbo and Executive Director, Treasure, United Bank for Africa (UBA), Mr. Femi Olaloku made this suggestion while serving as panelists at the Nigerian Stock Exchange/Bloomberg CEO roundtable held in Lagos yesterday.

Mr. Onasanya while speaking on the topic: The Nigerian banking environment in a low oil price, advocated that the Central Bank of Nigeria (CBN) should allow market forces determine the true value of the naira.

He argued that the present artificial rate at which the nation’s currency is trading is unsustainable, adding that the current scarcity of forex in the country is a signal that the country’s economy is contrasting.

“Manufacturing companies cannot fund importation of their raw materials. Even Nigerian banks are shopping for forex from the international market. Everything is at standstill.

“We can’t support the naira at N200/$1. There is need for slight adjustment of the naira. There is no need to panic, because Nigeria is not the only country adjusting her currency,” the FBN boss stated.

He claimed if the country fails to allow the naira find its true value, the consequences may be very grave.

In the same vein, the Group Managing Director, Zenith Bank, Mr. Peter Amangbo urged the CBN to allow market forces prevail in the country’s forex market, stressing the need for the apex bank to open up the market.

He noted that the market should be allowed to determine the degree of the devaluation of the naira, saying the country lack the resources to continue to depend the naira.

“There are too many things to balance, backlog is there in one hand and stabilizing the naira on the other,” he said.

The Zenith boss added that there is panic in the entire system and everybody wants to buy forex.

The expressed optimism that the present situation is redeemable, adding the decision of the CBN to deny importers of goods that have local substitutes access to forex from the interbank market is laudable.

He explained that this would make it expensive to import these items and promote local production as well as reduce the pressure on the naira.

According to him, he foresees the reversal of some of the measures that apex has put in place to strengthen the naira very soon as the country’s economy improves.

Mr. Amangbo encouraged Nigerians to be ready for a trade-off with the government if they hope to see the nation’s economy pick up again.

“The government have to remove constrains that are inhibiting economic growth and make it to be private sector driven,” he advised.

Executive Director, Treasure, United Bank for Africa (UBA), Mr. Femi Olaloku, supported the arguments of the bank chief executives advocating for the devaluation of the naira.

He reasoned that the devaluation of the naira it is an approach we need to take as a people.

He stressed that the CBN monetary policies aimed at aimed strengthening the country’s currency must be backed up with appropriate fiscal policies.

“If there is natural adjustment of the naira, many people will be willing to participate in the forex market. It will not be only the CBN that will be supplying forex,” he asserted.

Meanwhile, major players in the Nigerian oil and gas sector have reiterated the need to reduce the cost of the production of the country’s crude oil.

The CEO, Seplat Petroleum Development Company Plc, Mr. Austin Avuru said the price of crude oil in the international market is presently determined by the cost of production.

“If we can’t bring down the cost of production, we won’t be able to play the games the big Oil Petroleum Exporting Countries (OPEC) are playing,” he opined.

The Chairman/Managing Director, Mobil Oil Plc, Adetunji Oyebanji noted that the country failed to manage its refineries properly as demand increased.

“Today, even if the refineries are working at 100 per cent capacity, they won’t be able to meet our domestic demands,” he stated.

The Group Executive Director, Oando Plc., Mr. Mobolaji Osunsanya on his own part reasoned that the country’s refineries cannot work in a regulated regime.