NIGERIA’s Vice President Yemi Osinbajo has faulted the Central Bank of Nigeria (CBN)’s management of foreign exchange (FX), noting that Nigeria might not increase the supply of dollars but could effect a better demand management strategy to address market concerns.
The vice president, who spoke on Monday at the Mid-term Ministerial Performance Review Meeting held in Abuja, also expressed concerns that poor collaboration between the monetary and fiscal authorities affected the efficient delivery of MSME interventions.
“As for the exchange rate, I think we need to move our rates to be as reflective as possible. This is my own respective view, and it is the only way to improve foreign exchange supply to the country.”
Osinbajo noted that Nigeria at the moment might not be able to get new dollars but stressed the importance of a better demand management strategy by the apex bank.
“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.
“Anyway, all those are issues when CBN governor has time to address them in full.”
The vice president cited an instance where some Nigerians received COVID-19 interventions more than once because the CBN and the Ministry of Industry, Trade and Investment partnership was weak.
“More importantly, sometimes, we get people benefitting more than once in our interventions because we simply have no line of sight as to what is going on one side. The CBN doesn’t know what we are doing, we don’t know what they are doing. That synergy is absolutely important.
“But I think that one of the most important things is that there must be synergy between the fiscal and the monetary authorities. Sometimes it appears as if there is a competition, especially on the fiscal side.
“If you look at some of the interventions, you find that those interventions are interventions that should be managed by the Ministry of Industry, Trade and Investment. Interventions such as the MSME interventions, the Ministry of Trade and Investment should know what the CBN is doing.
“In other words, if the CBN is intervening in the MSME sector, it should be with the full cooperation of the Ministry of Industry, Trade and Investment