By Providence Ayanfeoluwa
The Institute of Chartered Accountants of Nigeria, ICAN has said that the Central Bank of Nigeria, CBN, and Nigerian National Petroleum Company Limited, NNPCL, should disclose the extent of unpaid foreign exchange bills and outstanding debt obligations to enable Nigerians know if the emergency $3billion crude oil repayment loan facility from Afrexim Bank will make a sustainable impact on the foreign exchange rate.
Also, the Institute recommended a postponement of the implementation of non-critical dollar-denominated components of 2023 budget until the FX situation improves.
In his recommendation paper titled: “The NNPCL $3billion Afrexim Bank Borrowing, Naira Exchange Rate and Fuel Subsidy: Our Position”, 59th President of ICAN, Innocent Okwuosa, said that ICAN is ready to offer its support to the government and other stakeholders in the effort to address economic challenges and move the country forward.
He added that government must imbibe comprehensive economic reforms, improve governance, policy consistency and make concerted efforts to diversify the economy. The devaluation of currency should be the last resort to the economic imbalance.
He said that accountability and transparency demand that the cost of refining a litre of fuel locally or importing same is disclosed to Nigerians, as any choice in this affects exchange rate and fuel price.
Okwuosa raised concern as to why NNPC is the channel for obtaining the $3 billion loan rather than the CBN even as he pointed out that there are some issues that need to be addressed.
On the medium-to-long term recommendation for FX demand side, ICAN said: “Tackle inflation and reduce currency substitution on account of low purchasing power of the Naira; Promote patronage of made in Nigeria goods using enabling laws; Improve the standard of education and health facilities in the country to reduce education and medical tourism; Encourage companies operating in Nigeria to source raw materials locally via backward integration; Fix the refineries to reduce import of petroleum products with attendant reduction in FX pressure; among others.
On the supply side: “Diversify the export base especially through agriculture and solid minerals; Set up a Fiscal and Monetary policies Coordinating Committee to among others, ensure goal congruency and stability in policies that address macroeconomic indices; Enhance Ease of Doing Business, tackle corruption and insecurity to make way for increased FDIs; Recapitalize NEXIM to be in a stronger position to incentivize exports; among others,” Okwuosa said.
