….asks govt to meet OPEC quota, check crude oil theft, resume domestic refining
The Nigeria Employers’ Consultative Association (NECA) has given the Federal Government tips on how to reduce the pressure of Foreign Exchange (FOREX) and other economic challenges associated with it, advising the government to ramp up the production of crude oil to not less than 1.8 million barrel per day to meet Organisation of Petroleum Exporting Countries (OPEC) quota for the country, among others.
The umbrella body for employers in the country and the voice of business in Nigeria also urged the government to pursue and eliminate crude oil theft and resume domestic refining to save FOREX for other productive uses.
NECA in a statement titled Ramping –up FOREX Revenue, Crude Production and Non-Oil Exports-Urgent Imperative for Economic Recovery, its Director-General, DG, Adewale -Smatt Oyerinde, said “The unification of exchange rate policy was supposed to bring into convergence the exchange rates at the official FOREX market and the parallel market windows. At the beginning of implementation, the policy appeared to have gained traction but has now progressively become undesirable. While the official exchange rate stood at about N781.64/US, the parallel market was around N900/US$ as noted by the Central Bank of Nigeria (CBN), the differential of which shows a premium of about 21 percent between the two windows.
“As observed by the CBN, illegal remittances through inappropriate channels and unlawful selling of Dollars by commercial banks are the core reasons the Naira value has continued to degenerate. While agreeing with the apex bank, we want to add that the continuous existence of the parallel market, particularly in open places is more than culpable for the ugly development. We believe that as long as the “black market” with the institutionalized name, “parallel market” persists, unruly banks in the country will continue to round-trip, notwithstanding the implication on the economy.
“The persistent wrong channeling and mismanagement of FOREX on organized businesses has become agonizing. Business working capital, production, capacity utilization, investment, sales, etc., have contracted significantly, while firms are forced to downsize. The grey trajectory portends tragedy for the economy if not quickly addressed. Consequently, a more stringent action that will significantly reduce the influence of economic saboteurs in the FOREX value chain must be implemented. We believe that if the Parallel market is not legal, then it is illegal and should be treated as such.
“To reduce the pressure of FOREX and other economic challenges associated with it, we urge the Government, as a matter of urgency, to ramp up the production of crude oil to at least the 1.8 million barrel per day OPEC quota for the country; pursue and eliminate crude oil theft; resume domestic refining to save FOREX for other productive uses; and be fiscally disciplined in terms of Dollar dealings. These measures will no doubt, avail more FOREX to CBN for onward intervention in the official FOREX market, which will enable businesses to source FOREX to sustain business activities.”
