Amid mounting economic difficulties attributed to soaring food inflation and the depreciation of the naira, Chief Emeka Obegolu, SAN, the President of the Abuja Chamber of Commerce and Industry (ACCI), has put forward a series of recommendations for the government to address the current economic crisis.
In an exclusive interview with journalists at the ACCI headquarters in Abuja, Obegole said the sharp decline of the naira in the foreign exchange market is primarily due to illicit naira transactions as well as the undervaluation of the Nigerian currency.
He emphasized that the pressure on the naira predominantly results from illicit financial activities rather than legitimate business transactions, underscoring the urgent need to combat corruption within the system.
“The core issue lies in illicit naira transactions for dollars. The government must tackle this illicit practice head-on. I am convinced that the naira is undervalued, with its true value estimated to be between 800 and 1,000 naira. The undue strain on the naira is predominantly fueled by corrupt practices rather than legitimate business activities. Thus, addressing corruption is paramount,” Obegolu stated.
In addressing the issue of food inflation, the ACCI President underscored the necessity for the government to implement measures aimed at boosting citizens’ purchasing power and avoid imposing arbitrary taxes and high exchange rates on imported goods. He stressed that importers inflate prices due to the high costs associated with clearing their goods. Obegole emphasized that governance should not solely prioritize revenue generation but should also focus on ensuring citizen satisfaction.
Chief Obegolu recommended a shift in approach for the government, advocating for support to be extended to local businesses to enhance competitiveness and encourage local production of goods currently being imported at comparable rates.
“There is no valid reason for a shoe imported from China to be cheaper than one produced in Aba. However, this pricing disparity persists today. It indicates that the Chinese have harnessed technology to reduce production costs. Therefore, the government needs to invest in technology to bolster local enterprises.
“As a local entrepreneur importing machinery from China for shoe production, you acquire dollars at official government rates. In instances where you are unable to secure it, you resort to the foreign market. Subsequently, if there are unfavourable changes in exchange rates by the government before your goods arrive, you encounter challenges. This could result in additional borrowing to clear goods and navigate various checkpoints, ultimately diminishing your competitiveness. With the removal of petrol subsidies, heightened government support is urgently needed,” Obegolu highlighted.
Chief Obegolu emphasized the importance of avoiding speculations and baseless accusations against bank Chief Executive Officers regarding dollar hoarding. He urged the government to eradicate all avenues for malpractice and penalize any offenders identified by relevant authorities.
“The Economic and Financial Crimes Commission (EFCC) should present concrete evidence on how bank CEOs hoard dollars while declaring profits. Speculations can unjustly damage reputations by implicating both innocent and guilty parties alike. Therefore, reliance on factual information is crucial. We must ascertain how these activities are conducted and hold wrongdoers accountable.”
