Recession: EU asks Nigeria to devalue the Naira

04-10-2016 

As Nigeria grapples with economic recession, the European Union (EU) has asked the Federal Govern­ment to devalue the Naira-the country’s currency.

The Naira officially exchang­es for N305.25 to the dollar while it sells for N475 to the American dollar at the black market.

The EU, through its Counsel­lor, Head of Trade and Economics Section, Fillippo Amato, said that the Federal Government needs to devalue the Naira because the country’s economic challenges cannot be addressed with tradi­tional development tools,

In an interview with journal­ists on Monday, he said the reces­sion was a recent development caused by several factors such as the fall in oil prices and the re­surgence of militancy in the Ni­ger Delta.

According to him, for Nige­ria to exit the current recession, the government must take serious decisions no matter how unpopu­lar they may be, stressing that the Muhammadu Buhari administra­tion must “fully and effectively de­value the Naira.”

Amato said: “Devaluing the Naira is a measure, which will fi­nally reassure investors and attract new capitals to the country. At the same time, it will further reduce imports, thereby removing artifi­cial forex restrictions, and remov­ing any potential waste of scarce resources such as the fuel subsidy.

Amato urged Nigeria to take advantage of the devaluation of its currency by diversifying its sources of foreign exchange rev­enue through boosting its non-oil exports.

“Improving security (in the North East and Niger Delta) and ease of doing business are also key factors on which the government must urgently work to re-launch the economy,’’ the EU said.

Amato said that the EU had been playing critical roles in Ni­geria and the Economic Commu­nity of West African States (ECO­WAS) development.

Among the important pro­gramme the EU is implementing in Nigeria with its partners – GIZ, DFID/Adam Smith Internation­al and UNIDO, according to him, is the Nigerian Competitiveness Support Programme.

Amato said that the pro­gramme aims at improving the quality of Nigerian products to comply with international stand­ards. The programme is provid­ing capacity building to sever­al Ministries, Departments and Agencies (MDAs) such as the Ministry of Agriculture and Ru­ral Development, the Standards Organisation of Nigeria (SON), the Consumer Protection Coun­cil (CPC), the Nigerian Customs Services (NCS) and the National Agency for Food and Drug Ad­ministration and Control (NAF­DAC).

He continued: “We support the trade institutions in the for­mulation and implementation of a sound trade policy (support to the Federal Ministry of Industry, Trade and Investment, and Nige­rian Customs Service).

“This is to improve the busi­ness environment, with pilot projects in Kano and Kaduna to improve the procedures for ob­taining land titles, and business licences,’’ he said.

Amato said that the EU would increase its support to the country under the Econom­ic Partnership Agreement (EPA) if ratified.

“EPA aims at boosting indus­trialisation and sustainable de­velopment of West Africa, both through improved (predictable, transparent and long-term) trade relations and through a develop­ment cooperation component.