From Ajiri Daniels, Abuja
The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) and stakeholders across public and private sectors have expressed grave concerns over the parlous state of Nigeria’s foreign reserves and its concomitant effects on the economy.
According to the institute, Nigeria is currently nursing the twin disease of over-reliance on declining crude oil receipts and raging insecurity; the latter of which has fractured production and shrunk exports.
The institute posited that any nation dreaming of fattening its external reserves must be more export-oriented than being heavily import dependent like Nigeria. This, according to them has made the naira come under intense pressure as importers keep buying United States dollars to import various goods consumed in Nigeria leading to a perilous exchange rate of the naira against the dollar.
These submissions were made at ICSAN’s 2022 Annual Public Lecture held recently in Abuja. The event with the theme: “External Reserve Dynamics and Governance Challenges”, featured financial experts and key stakeholders in the public and private sectors.
Speaking during her opening remarks, the Registrar and Chief Executive Officer of ICSAN, Mrs. Taiwo Ganiyat Olusesi (FCIS) noted that the purpose of the Lecture was to bring all issues relating to external reserves to the front burner of intellectual discourse from which useful recommendations can be made.
Prof. Bongo Adi of the Lagos Business School (LBS) addressed some of the major forces that shape the Nigerian economy in a keynote address. He asserted that domestic production structures, which are also a key factor in determining the value of the naira, are a function of sustained foreign exchange earnings.
“It is important to note that the main sources of foreign exchange supply to a country include foreign currency receipts from exports of goods and services, monetary gifts and inflows of capital from abroad such as loans and investments. It is from this earnings that the demand for foreign exchange is met to spend on imports of goods and services.
“For Nigeria whose currency is not convertible or serve as international currency, she must necessarily earn foreign exchange through high productivity and exports of goods and services, receipts of foreign loans and investments in order to import needed goods and services aimed at the development of the economy and enhancing the welfare of the citizens. Also, high levels of foreign exchange earnings and external reserves are the backbone of the naira exchange rate. They ensure stability of the rate while low levels weaken the naira,” Prof. Adi explained.
Speaking further, CEO of Emerging Africa Capital Group, Mrs. Toyin Sanni (FCIS), NNPC’s General Manager, Litigation, Property & Environmental Law Dept., Mr. Rufai Khalid (ACIS) and other discussants at the Lecture jointly emphasised the need for Nigeria to create an export-oriented economy and look beyond diminishing crude oil resources for economic sustainability. They therefore called for prudential management of the economy and commitment from all relevant stakeholders towards reviving the economy and boosting external reserves.
In his submissions, the Minister of State, Labour and Employment, Mr. Festus Keyamo (SAN) while commending ICSAN for their role in economic and social development, also highlighted measures being put in place by the Federal Government to boost job creation and grow the nation’s Gross Domestic Product (GDP).
He ascribed some of the current economic difficulties to global phenomena like the COVID-19 epidemic and the global economic catastrophe, which have had an impact on economies all around the world. However, he pointed to the skill sector as being crucial to closing Nigeria’s unemployment gap and raising productivity.
He said: “There is no justification for the high rate of unemployment we have in Nigeria, because we are a very rich nation and we should be able to harness our natural resources to provide jobs for our people. What we are trying to do is to look at the skill sector. I think that is the key to unlocking the unemployment market in Nigeria.
“Globally, people acquire skills and they become self-employed while government provides the necessary resources, empower them and give the starter packages and they become self-employed. So, we are concentrating on that. At the level of the Ministry of Labour and our agencies, especially the National Directorate of Employment (NDE), We have a lot of programmes where we try to skill up Nigerians for them to be self-employed.”