CBN governor was summons by Senate over naira value

The Senate, yesterday, passed a resolution, summoning the governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, to brief the lawmakers on the depreciation of the Naira, particularly among major currencies of the world like the US Dollars, British pound sterling, amongst others.

This was also as the lawmakers urged the Federal Government to take steps to diversify the nation’s economy from oil exports into one that depends on taxation, agriculture, manufacturing, international tourism and solid minerals prospecting as part of efforts to arrest the depreciation of the Naira.

These resolutions were the outcome of the motion entitled, “State of the Economy: Naira Depreciation and its Implications,” and sponsored by Senator Nazif Suleiman.

Also yesterday, the Senate opposed the suggestion for the reintroduction of tolls collection across the nation’s federal highways as a means of generating additional income for the construction of new roads and the maintenance of existing ones.

Instead, the lawmakers passed a resolution, urging the Federal Government to urgently look for additional ways and means to fund road rehabilitation and maintenance.

The senators also urged the Federal Government to, through the Federal Ministry of Works and the Federal Road Maintenance Agency (FERMA), undertake immediate repairs and dualisation of major highways and inter state roads across the country.

The lawmakers directed its Ad-hoc Committee on Works to embark on audit of all road projects in Nigeria with a view to producing raw data for further necessary legislative action.

It said there was a need to find lasting solution to road problems in the country in view of the attendant negative impact on trade and commerce.

The lawmakers came to this decision following the debate and adoption of the resolutions contained in the motion sponsored by Senator Dino Melaye (Kogi West) and co-sponsored by 92 other senators entitled, “Collapse of Road Infrastructure in Nigeria.”

In his lead debate on the Naira depreciation, Senator Nazif Suleiman (Bauchi North), said the Senate was worried that naira had depreciated in the last few months at a much faster rate than it had appreciated in the last two years.

He further argued that the depreciation was the consequence of the negative cash flow which he said resulted from the downward trend of oil price.

The situation, he added, had been worsened by speculations in the foreign exchange market.
He also said the Senate observed that the foreign exchange needs of various sectors of the economy were being made available while Nigeria’s commitments in the global economy had dwindled.

The senator also expressed suspicion that the Nigerian banking industry might be currently defaulting in the global economy, a situation he said had been sending a wrong signal about the economy.

Suleiman also said the speculation caused by the situation was resulting in a huge capital flight with attendant inflationary consequence which he said would affect an average Nigerian on the street.

He noted that the “illicit fund flows and money laundering going through Nigerian financial system contributes in weakening the value of the naira which has made the recent decision of CBN to increase its vigilance to ensure that Nigerian banks are not used as conduit for illicit fund flow and money laundering in foreign currencies.”

He canvassed the need to regulate demand and supply of foreign exchange by the CBN with various options considered to curtail naira depreciation and consequently discourage speculations.

In his contribution, Minority Whip, Senator Philip Aduda, blamed the downward slide in the value of naira on the inability of the federal government to put in place stable economic policies.

Also speaking on the motion, Senator Gbolahan Dada (Ogun West), said if the situation must be effectively tackled, Nigeria must define its economic policies and make laws that would address fraud.

He regretted that Nigeria’s dependence on imported items without tangible production had been the bane of stable foreign exchange.

In his remark, Senate President Bukola Saraki said all powers must be deployed to defend the naira, adding that the influx of foreign items into the country must be adequately curtailed in a way that activities of speculators would be brought under control.

Also, yesterday, the Senate committed the request of President Muhammadu Buhari for the approval of $75million (N14.7billion) loan from the World Bank for Edo State Government to the yet to be constituted Standing Committee on Local and Foreign Debts when constituted.

But the Senator representing Edo Central, Clifford Odia, opposed the request on the grounds that it would plunge the state into further indebtedness, saying if the loan is approved, it would raise the Edo State’s debt profile under Oshiomhole to N44.1 billion ($225m) in World Bank.

In his remarks at the end of debate on the motion on the collapse of infrastructure in the country, Saraki regretted that the poor state of the roads in the country had contributed negatively to the development of the economy.

He lamented the fact that roads in smaller countries in the region were in better shape than roads in Nigeria.

According to him, there is a need for concerted effort to ensure that factors responsible for poor condition of roads in the country are tackled.

“For Nigeria to develop we must begin to look at why we find ourselves in this situation.

“We must also look at the contribution of private sector as well as the quality of contractors who handle road construction and rehabilitation,’’ he said.