Multiple exchange rates causing problems for Nigeria’s economy- Prof Akpan Ekpo

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By Ogenyi Ogenyi, Uyo

A Professor of Economics and former Vice Chancellor of the University of Uyo, Prof Akpan Ekpo has said that the continued application of multiple exchange rates has been one of the major banes of the Nigerian economy.

He has also said that the structure of the Nigerian economy has not favoured the opening up of the foreign exchange market for exchange rate determination through market forces.

Ekpo spoke yesterday in Uyo at a public lecture titled, “The ‘Collapse’ of the Naira” organized by the Faculty of Management Sciences, University of Uyo.

“The problem was not necessarily the dual exchange rates but the prevalence of multiple exchange rates. There were exchange rates for religious pilgrimage, powerful private sector players and for government transactions.

“The management of the multiple exchange rates created serious problems for the mangers of the economy particularly, the Central Bank of Nigeria (CBN).” He explained.

Ekpo regretted that the foreign exchange market is not competitive but added that for this to change, the economy has to become productive in the long run, producing non oil goods and services for export and earn foreign exchange for the economy.

“For now, the economy must return to managed float exchange regime and direct policies at attracting investment, foreign and domestic. But for this to occur, the security situation must be adequately addressed.” Ekpo said.

He said that, the Nigerian economy remained at its lowest ebb as all macroeconomic indicators have been moving in the wrong direction since 2015 with inflation in double digits, rising unemployment and underemployment.

The guest lecturer further stressed that the Naira has depreciated considerably due to the removal of fuel subsidy and the merger of the dual foreign exchange market in order to allow market forces to determine the value of domestic currency.

Fuel subsidy removal Ekpo said has also resulted in not only untold hardship for majority of Nigerians but, has sent unnecessary shocks to the foreign exchange market.

He suggested that if the free fall of the Naira is not abated, it might result in hyperinflation which may lead to currency crisis with debilitating effects on the economy nothing that, the Naira has not collapsed for now because of some interventions by the Central Bank of Nigeria (CBN).

He appealed to President Tinubu’s administration to be bold enough to reverse some of the government policies that have resulted in untold hardship on the citizens adding that constant power supply remined a necessity to drive productivity for improved economy.

Also, the Dean, Faculty of Management Sciences, Prof. Uduak Ubom said that while the nominal value of Naira remained the same, the purchasing power has been declining on a daily basis.

Ubom, however, said that the rate, rapidity, frequency and persistency as well as the influences of the decline in the currency values on the performance of the economy differs from one country to another.

He said the faculty of management sciences has taken as a dedicated function to organize public lectures to examine, inform and educate members of the public on emerging issues from time to time.

“It is on this note that the Faculty of Management Sciences has assembled experts with sound and established wealth of knowledge and adequate levels of exposure to examine and educate us on this threatening issue, the ‘Collapse’ of the Naira.” He said.

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