To strengthen the value of Naira against foreign currencies especially, the United States dollar, financial expert, over the weekend, called on the government to immediately come out with new reforms, regulatory frameworks and guidelines for the nation’s foreign exchange market.
Speaking on a radio programme monitored by our Correspondent, Samuel Showunmi, a Capital Market Executive at Iron Global Markets Limited, on the short and long term solutions to solving depreciation of naira, he said,operators are taking rules into their own hands because of absence of FX regulatory guidelines.
According to him, “When laws come in, people will understand the dos and don’t regarding their activities in the foreign exchange market.
“There are no simple or quick fix measures. The measures must be a consolidation of different strategies and policies. The government must quickly come out with FX reforms policy and I know that the Central Bank of Nigeria (CBN) is working on a new regulatory framework for the FX market but I will want to advise that we don’t delay too much because delay can be dangerous.
“Currently, what it means is that we don’t have any FX regulatory guidelines in place so people are technically taking the rules into their hands and doing whatever they like but when laws come in, people will understand dos and don’t regarding their activities in the market. Also, CBN will start their surveillance, monitoring and enforcement.
“I think CBN is smart because in the last few weeks, CBN has saying it’s moving some of its key departments to Lagos. It’s a strategic move and I think market operators should be aware of this because it’s a move that is tilting towards CBN trying to move closer to the market and that tells us that the reforms and guidelines will soon come out and when the guidelines is out, CBN is closer to the market and surveillance, monitoring will follow suit then enforcement.
“That is smart, but I will advise that we don’t delay the regulatory framework. It should come out on time especially now that they have moved base to the theatre of operations and trying to set things in place which is a very good one. This means CBN is prepared and they know what to do and that will address some of the issues we are currently experiencing in the short term,” Showunmi stated
Showunmi explained that, on the long term, government should increase tax base by capturing so many Nigerians in the tax net.
He stated further that Nigerians must continue to patronise locally made goods saying huge disparity between Naira and Dollar fuel poverty and widens the inequality gaps.
“In the long run, it’s for us to concentrate on those activities that will sustain the supply side. Like I said, keep the oil production level up and if we can not meet up to the quota, let’s sustain the current level, we shouldn’t go down on the current level. Policies that will attract foreign investors to operate in our market though, President Bola Tinubu is championing the course by traveling and addressing investors, these are the moves we need.
“On the fiscal side, we must come out with reforms that will support such move and that’s tax tariff and regulations. On the tax side, we must look at increasing govt. revenue by increasing the tax base and not the tax rate,” it pointed out.
