Senate summons CBN governor over naira depreciation

CBN Governor, Mr. Godwin Emefiele

The Senate on Wednesday passed a motion directing the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, to appear before it to brief members on the state of the nation’s economy, especially the alarming naira depreciation.

The upper chamber gave the directive after an exhaustive debate on a motion moved by Senator Nazfiz Suleiman (Bauchi North) entitled: ‘The state of the economy: Naira depreciation and its implications’.

The senators also urged the Federal Government to step up efforts to diversify the nation’s economy to depend on taxation, agriculture, manufacturing, international tourism and solid mineral prospecting. Suleiman had in his lead debate noted with serious concern the state of the nation’s economy as it affected the continuous depreciation of the naira.

He expressed worry that naira had depreciated in the last few months at a much faster rate than it appreciated over the last two years.

The senator further argued that the depreciation was the consequence of the negative cash flow, which he said resulted from the downward trend of oil prices.

He added that the situation had been worsened by speculations in the foreign exchange market.

Suleiman also observed that the foreign exchange needs of various sectors of the economy were not being made available, while Nigeria’s commitments in the global economy had dwindled.

The senator also expressed concern that the Nigerian banking industry might be currently defaulting in the global economy, stressing that the situation had been sending a wrong signal about the state of the economy.

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

“The illicit fund flows and money laundering going through Nigerian financial system contribute in weakening the value of the naira, which has made the recent decisions of CBN to increase its vigilance to ensure that Nigeria banks are not used as conduit for illicit fund flow and money laundering in foreign currencies,” he said.

He stressed the need to regulate the demand and supply of foreign exchange by the CBN with various options in order to curtail naira depreciation and discourage speculation.

In his contribution, the 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.

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 lamented that the country’s dependence on imported items without tangible production had been the bane of a stable naira exchange rate.

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

Punch