₦airaland Forum

Adesiji77:
From deregulation to devaluation...

http://www.punchng.com/flexible-forex-policy-coming-osinbajo/

Cc: lalasticlala, dominique, Mynd44

’Femi Asu

Vice President Yemi Osinbajo has said the country is substantially re-evaluating its foreign exchange policy, adding that a flexible approach should be expected soon.

“We expect that with a more flexible policy, we will be able to attract more capital into the system and ease business,” Osinbajo said at an investors’ conference held by Renaissance Capital in Lagos on Wednesday, adding, “We expect that very soon we will see a more flexible approach to the currency.



“We believe there must be some substantial re-evaluation of the foreign exchange policy, especially with a view to increasing foreign exchange supply, encouraging capital importation and also being able to allow free flow of remittances…we expect that with a more flexible policy, we will be able to attract more capital into the system and ease business.”

The vice president said the executive was “not responsible for monetary policy,” adding that he hoped the Central Bank of Nigeria would act soon on the policy changes he mentioned.

The collapse in the price of oil, Nigeria’s main export, has caused a huge shock in the country, the Financial Times reported.

Despite the decline in foreign exchange earnings due to the tumbling oil price, President Muhammadu Buhari has held tightly to his view that the naira should not be devalued further. Since taking office nearly a year ago, he has repeatedly voiced his support for the CBN Governor, Godwin Emefiele’s pegging of the naira’s official rate at 197-199 against the dollar since March 2015.

“We have effectively liberalised downstream sector of oil with a N145 price ceiling. Just not enough forex to continue NNPC fuel importation,” Osinbajo said.

He said he hoped to persuade the CBN to change some polices to improve foreign exchange supply.

He also said the government would make sure that the banks survive an economic crisis due to a slump in oil revenues.

“We will do anything to ensure that the banks remains viable,” he added.

On the renewed attacks on oil installations, he said, “We want to increase security around installations and we have to use a bit more technology and a dedicated force.”


’Femi Asu

Vice President Yemi Osinbajo has said the country is substantially re-evaluating its foreign exchange policy, adding that a flexible approach should be expected soon.

“We expect that with a more flexible policy, we will be able to attract more capital into the system and ease business,” Osinbajo said at an investors’ conference held by Renaissance Capital in Lagos on Wednesday, adding, “We expect that very soon we will see a more flexible approach to the currency.



“We believe there must be some substantial re-evaluation of the foreign exchange policy, especially with a view to increasing foreign exchange supply, encouraging capital importation and also being able to allow free flow of remittances…we expect that with a more flexible policy, we will be able to attract more capital into the system and ease business.”

The vice president said the executive was “not responsible for monetary policy,” adding that he hoped the Central Bank of Nigeria would act soon on the policy changes he mentioned.

The collapse in the price of oil, Nigeria’s main export, has caused a huge shock in the country, the Financial Times reported.

Despite the decline in foreign exchange earnings due to the tumbling oil price, President Muhammadu Buhari has held tightly to his view that the naira should not be devalued further. Since taking office nearly a year ago, he has repeatedly voiced his support for the CBN Governor, Godwin Emefiele’s pegging of the naira’s official rate at 197-199 against the dollar since March 2015.

“We have effectively liberalised downstream sector of oil with a N145 price ceiling. Just not enough forex to continue NNPC fuel importation,” Osinbajo said.

He said he hoped to persuade the CBN to change some polices to improve foreign exchange supply.

He also said the government would make sure that the banks survive an economic crisis due to a slump in oil revenues.

“We will do anything to ensure that the banks remains viable,” he added.

On the renewed attacks on oil installations, he said, “We want to increase security around installations and we have to use a bit more technology and a dedicated force.”

Devaluation is said to be driven by the need to boost FDI or capital importation, ease remittances, export proceed inflows and ease interest rate pressure, with the aim of supporting the funding of the FX market for petrol importers.

Government yesterday commenced efforts toward full deregulation of the downstream oil sector, as fuel importation was deregulated, paving the way for free market activity in the sector.

The vice president who addressed the over 100 investors and corporate representatives at the 7th edition of the Rencap annual pan Africa 1:1 investor conference, also spoke on some key areas -quick deliverables in the budget that the government intends to focus on, including power, transportation-rail project,housing etc.

Bismarck Rewane, chief executive, Financcial Derivatives Company yesterday hailed government’s moves towards full deregulation of the downstream sector, but insisted that this be followed with devaluation of the embattled currency.

“We must follow this with naira adjustment to say around N230 to the USD and if this happens, we will begin to see the parallel market rates drop to around N255 as we inch towards equilibrium. So what will be required will be a minimal naira adjustment. A very good start,” Rewane said.

Some analysts said last night, that Osinbajo’s revelation is a welcome one, since president Buhari had refused to devalue, despite public outcry for it in the past few months.

Buhari’s challenge was said to be exemplified by the fuel crisis, considered by some analysts as the worst in living memory.

This is so because the nation’s refineries have been mismanaged for so long, compelling Nigeria to rely only on imports of fuel, a development Buhari had adduced for his reluctance to devalue the naira ,which has been fixed at an unrealistic level against the dollar, which does not fluctuate with Nigeria’s changing fortunes.

The resulting distortions have continued to create a gaping spread between parallel and official exchange rates that encourages the very corruption Buhari has vowed to stop.

Although the analysts see this as a tough choice, given the tougher political environment, they agree that Nigerians are becoming impatient for the gains they voted for and have little appetite for further pain.

Without investment, they further argue, the country will neither grow nor diversify from its crippling dependency on oil.

This is because no investor will put money into an economy at one exchange rate, knowing that to take it out again might require losing a third of its dollar value.

The president, they argue, wants to eliminate the wasteful patronage on which the elites have thrived, and create an economy more dynamic in creating jobs for the masses. These are laudable long-term aims for which his government has yet to articulate a convincing strategy and expectations are higher even as one year of the life of this administration is gone without most of promises delivered.

“No economy can survive without fuel, electricity or foreign exchange,” an analyst said last night.

koboko69:
U read punch's version....

I didn't see anything about devaluation there.

worksmart:
Of course there are Nigerian newspapers that plagiarise the garbage that the clowns at bloomberg are writing.

Even the story does not say definitely that devaluation and foreign exchange policy would be reviewed.

Abagworo:
I expected a liberalization of currency market pretty soon. It will not come as a surprise.

NavierStokes:
So after all said and done the so called "wailers" plus IMF and the west have a point.

So much for intransigence of our supreme leader.

NavierStokes:
So after all said and done the so called "wailers" plus IMF and the west have a point.

So much for intransigence of our supreme leader.

rolchi:
Brother Stokes, you remember our discussion with a compatriot some days ago on another thread concerning the Oil/Gas Industry and Dr. Ibe Kachukwu?

Now this...just after two days of his Price Modulation Theory at the Kaduna Town Hall Meeting?

I strongly suggest that PMB should and must to separate the office of the GMD and a Minister of the Federal Republic.

grandstar:
The market is whopping his butt and he's now throwing in the towel.

Rare to fight the market and win!

NavierStokes:
Yea bro very well, I really wish Mr President can be humble enough to do that. Kachikwu himself doesn't even believe in Nigeria. Like we stated in the last thread some things are too sensitive to put out here, I would have given an account of a meeting some time ago if I could. Kachikwu knows all the wonderful and right things to do but sadly it's all about politics first.
Many professionals with excellent credentials have gone on to this petroleum ministry plus DPR, but the politics sadly devours them all and makes a mockery of their fine careers.

The president of you will agree with me made blunders with his appointments as you have rightly pointed out, same with Fashola's power, works and housing appointment. It's enough task for several people combined Into 1.

grandstar:
There's no way governmemt will deregulate the price of fuel and not eventually do the same with forex.

Donttforget fuel Import ers have to source dollars at the black market

okuneddie:
.I pray they do so..... meanwhile....









One day, I came back home late in the night.
DAD: Where are you coming from?
ME: I was at my friend's house.
DAD: Okay...
Right there and then, my dad called ten of my
friends.
4 of them said I was still in their house.
2 said I just left their house.
3 even went as far as saying, "Let me give him
the phone..."

Keneking:
Sai Buhari.

Official : N245
Parallel: N290

Babacele:
una wey dey there for 16 years wetin b una achievement? refinery no work, no light, roads na death row, employment sef na after paying on earth na to go collect for heaven a la Moro, money wey we sell from oil una steal, una no dey shame? Trial and error beta pass wicked thievery!

worksmart:
Lie lie !
Osinbajo can not announce devaluation consideration.

Any way this story is from unknown source.

worksmart:
Two sources you just given are known for negative and inaccurate reports on Nigeria's economy.

Take this story with a generous pinch of salt.

If this potential policy u-turn was credible, it would be also reported in Nigerian press and news media.

herbie27:
on who's legacy is dis government working on?, GEJ's who did nothing.

Stop deceiving urself cos is a year now and ur government is still clueless.

worksmart:
Yeye economists everywhere.

Explain how devaluation leads to availabilty of dollar?

The minister of state for Petroleum never used the word deregulation during his statement.
The fact is it is clear that the government has already long ago deregulated the oil sector.

What government did was to put in measures to prevent future fuel scarcity by selling fuel at a price that would make diversion to neighbouring countries unprofitable to unscrupulous marketers.

Truth234:
http://www.punchng.com/flexible-forex-policy-coming-osinbajo/

Babacele:
and that is why Nigerians that voted for GEJ in 2011 not voted him and PDP out in 2015? dey deceive unasef! until after 4 years before PMB go get time to listen to any genuine wailing..

Babacele:
legacy? the corruption we inherited which we are destroying and removing from this clime? refinery wey no work naa legacy? which legacy? Abegi wetin b legacy?