Nigeria Rebuffs World Bank, IMF At DC Meeting: Calls To Float Naira Laughable – CBN

by Samuel Abasi Last updated on April 24th, 2017,

Nigeria Rebuffs World Bank, IMF At DC Meeting: Calls To Float Naira Laughable – CBN. Amidst raging calls by the global business community, especially at the ongoing Spring Meetings in Washington DC, USA, for the Nigerian government to float the Naira, and liberalise its financial market, the Central Bank of Nigeria (CBN), at the weekend said the country had no intension of floating its currency in the face of its many security challenges. Proponents of the proposal to float the Naira argue that it would make the Nigerian economy more competitive and encourage foreign investors to come into the country.

But reacting to the calls by some participants at the Spring Meetings of the IMF / World Bank, CBN’s spokesman, Isaac Okoroafor, said the nation’s market was already extensively liberalised, hence the call to float the Naira was a bit laughable.

CBN spokesman, Isaac Okoroafor also said:

“ Yesterday (Thursday) when Madame Lagarde was discussing the economy of Egypt, she lamented herself, the devastating inflation that is in that country. Egypt, which has half Nigeria’s population, receives about $12 billion in foreign earnings and several billions from tourism.

We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to benefit from massive depreciation.
If you float the Naira today, and given recent discoveries by security agencies, you’ll discover that our case will be terrible. Egypt today has an inflation rate of almost 31 per cent, and Angola also has about 36 per cent inflation, ours is at 17.26 per cent.

If we float the Naira and we allow speculators and those with corruption money and all the people who create the bubbles in the economy to launch into the market, you can imagine the kind of situation we will get ourselves into.”

CBN Governor Godwin Emefiele

According to him, no country floats its currency; and just leaves it to the dictates of the market. Meanwhile, the bank has threatened to deal decisively with deposit money banks implicated in alleged efforts to frustrate Small and Medium Enterprises (SMEs) entrepreneurs from accessing foreign currencies to boost their operations.

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The warning came on the heels of widespread allegations that SMEs regarded as the live-wire of the nation’s economy are being frustrated from accessing the $20,000 special intervention fund approved for operators per quarter by the apex bank.

Speaking at a special press briefing on the sidelines of the ongoing Spring Meeting of the IMF/ World Bank in Washington DC, USA, Mr. Isaac Okoroafor, warned that the apex bank would sanction any deposit money bank that puts wage in the wheel of progress of the current economic reform programme of the Federal Government.

The Honourable Minister of Finance, Kemi Adeosun, is also currently in Washington DC, attending the World Bank and IMF Spring Meetings. She is participating in several events that are focused on the different aspects of the federal government’s economic reform agenda.

At her opening event on Monday, she gave an address at the Global Parliamentary Conference, which had several parliamentarians from around the world present. She focused on Nigeria’s economic reform agenda and the need for strong executive and legislative collaboration.

“The government is focused on resetting the Nigerian economy by addressing our traditional over-reliance on oil revenues and establishing the basis for sustainable non-oil revenue growth,” said Kemi Adeosun.

Nigeria Finance Minister Kemi AdeosunWhile addressing senior representatives from the World Bank and IMF, as well as over 150 parliamentarians the Minister called for greater focus on collaboration in illicit financial flows from Africa as a core pillar of the government’s strategy to significantly enhance domestic government revenue and deliver sustainable economic growth.

Here are three takeaways from her address

On Illicit Capital flows

“To improve non-oil revenues, we have to address illicit capital flows. When stolen money is transferred from Nigeria or other African countries, there are too few questions asked by those countries that receive the funds, but when we identify those funds as stolen and seek to recover them, there are too many questions being asked,” said Kemi Adeosun.

On the recovery of stolen funds

“There is money sitting in foreign bank accounts that we have spent over a decade trying to recover. That is money that could deliver significant value for Nigeria as we seek to increase spending on critical infrastructure and establish a basis for long-term sustainable growth,” said the Minister of Finance.

“I hope that the Automatic Exchange of Information scheme coming into force next year will be a step towards achieving greater transparency, but we need more collaboration amongst parliamentarians in Africa, and across the World to ensure that this situation improves and those recipient countries are held to account.”

Domestic agenda to ensure significant reductions in ‘leakages’ of public funds

“We are going after those who have stolen our money. We have put in place a very successful whistleblower programme that is delivering results and allows those who report illicit activity to receive up to 5 percent of any funds that we recover. We are also significantly improving our financial management controls to ensure that it is considerably more difficult for public funds to be diverted. We have to do more though and that means collaboration with the legislature. We need tighter tax and financial reporting legislation and to ratify bilateral agreements so that our enforcement agencies are empowered to deliver the results that we need,” said Kemi Adeosun.

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Samuel Abasi

Samuel Abasi

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