Naira is no longer store of value – NACCIMA
By Charles Okonji
With continous loss in the value of the Naira against the US Dollar, the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA) has said that Naira is no longer a store of value.
The Director General of NACCIMA, Dr Shola Obadimu who was reacting to the third quarter report, stated that the loss of naira value on the daily basis is a clear indication that the Nigerian currency is no longer a store of value.
According to Obadimu, “With the rate we are going, it seems our highest currency denomination which is the ₦1,000 note is useless, because the Naira is so weakened that it’s value is just becoming like ₦1. Naira is supposed to be store of value but it is no longer so.
“When you have money in your pocket you feel that you have something to use for exchange for value, but this is defeated as the value for today will be different tomorrow. But for the industry that require forex to import raw materials and other inputs, they are highly lamenting daily loss of value. Unfortunately they don’t have the capacity source for forx at the official window, but people going on pilgrimages are the ones getting forex at the official rate. I will advise the government to harmonize the rate.”
The NACCIMA DG noted that there is need for the government to stimulate the economy if they want to to save the current situation.
He pointed out that the agricultural sector has been hit with insecurity and weak infrastructure, stressing that people are scared of going to the farms for fear of being kidnapped.
“This insecurity is one of the contributing factors that made the manufacturing sector to record nagative GDP growth. This is because if a company is sending goods to Taraba and the truck driver is being kidnapped on his, where will the company get as much as ₦50million ransome for the driver. How much is the company’s turnover. So, what is the essence of producing what you cannot take to the market. This is discourage productivity and if you you don’t produce, you can’t export, and you can’t earn, so how de we get forex.” He expressed.
Obadimu noted that the country’s population grows every day while the aggregate productivity is expected to grow correspondingly, saying that when the population is growing and aggregate productivity is on the steady dicline, it means negative productivity per capita.
He called on the government to look at the economic indicators and fix them, adding that fixing infrastructure will alley manufacturers fears.
“The cost of finance is also very high and something has to be done urgently to arrest the situation. The rising interest rates and the cost of other inputs are the reasons that the manufacturing sector is experiencing decline in growth.
“Without paying lips services, the government needs to give people the reason to believe that they are concerned about their welfare. The government should know that elections would come and go, election is not the end of the world, so they should pay more attention towards fixing the fast degenerating economy.
“The cost of energy is contributing significantly to the cost push inflation that we are experiencing, because everyone is struggling to provide his own energy. Without energy no one can produce.
The cost push inflation is as a result of cost of manufacturering inputs.
Commenting on 2023 expectations, the NACCIMA DG advised that Nigerians should be looking out for higher inflationary figures.
In his own word, “The price of refined petroleum products are going higher on the daily basis. This is because the government is trying to liberallise petroleum products prices.
“Globally, petroleum products prices are hovering around the dollar and it is not less than a dollar, so Nigerians may have to buy petrol as much as ₦400. When you look at the subsidy claims, it far exceeds supply. There are lots of activities going on in that sector that is not transparent.”
Recall that the official exchange rate of US Dollar to Naira is ₦444.67 by Central Bank of Nigeria (CBN), but at the parallel market, $1 dollar exchanges between ₦735 and ₦800
