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Osinbajo Explains Why Presidency Opposes Naira Devaluation

Channels Television  
Updated October 30, 2015

NairaThe Nigerian Vice President, Professor Yemi Osinbajo, has given reasons for the government’s disapproval of further devaluation of the nation’s currency, saying it is not an appropriate option in the current economic realities and offers no solutions as far as the Buhari administration is concerned.

President Muhammadu Buhari had earlier expressed his views that a further devaluation of the Nigerian Naira was not healthy for the economy.

At a meeting on Thursday with the Italian Ambassador in Nigeria, Mr Fulvio Rustico and the Canadian High Commissioner in Nigeria, Mr Perry John Calderwood, in his office in Abuja, Vice President Osinbajo emphasised President Buhari’s views and said he would also not support further devaluation of the Naira.

He said: “I don’t agree on devaluation of the Naira and it is not that I am doctrinaire about it. In the first place, it is not a solution. We are not exporting significantly. And the way things are, devaluation will not help the local economy.”

“What we need to do is to start spending more on the economy and then things will ease up a bit”.

He observed that the issues around the economy were no exact sciences, stressing that “what is important is to be reasonably flexible in dealing with them”.

To Bring Some Stability

In a statement issued by the Senior Special Assistant-Media & Publicity, Laolu Akande, the Vice President outlined the Federal Government’s plans to set-up a $25 billion Infrastructural Fund which would be sourced from local and international sources, through Nigeria’s Sovereign Wealth Fund and the pension fund among others.

He disclosed that already, other Sovereign Wealth Funds had indicated interest in the fund which would be used to address the nation’s decaying road, rail and power infrastructures.

“This is our approach to speeding up the country’s infrastructural development.

Osinbajo on Nigerian Naira
Vice President Yemi Osinbajo totally opposes further devaluation of the Nigerian Naira

“The current foreign exchange restriction is a temporary measure to ensure that “we don’t deplete our foreign exchange substantially at a time when the prices of oil in the international market is dropping,” Professor Osinbajo restated.

According to him, the restriction was put in place to bring some stability to the oil-rich nation’s foreign reserves without which Foreign Direct Investment, (FDI) might be affected.

“The FDI is more forward looking than portfolio investments which are being affected by the decision to manage the foreign exchange resources of the country at this time.

“I am not sure devaluation is the issue, but how to ensure foreign direct investment which is more useful,” the Vice President noted, emphasising that he expects a bit more stability and direction in the next few months.

He further said that the Federal Government would work with the Central Bank of Nigeria to ensure that legitimate businesses were not badly impacted by the current foreign exchange restrictions, especially those who had previous contracts and loan commitments.

Professor Osinbajo expressed the appreciation of the Federal Government to the Italian and Canadian envoys on behalf of President Buhari and also looked forward to closer and deeper ties between Nigeria and the two countries.