The expert stated this in an interview with newsmen, noting that the government must immediately come out with new reforms, regulatory frameworks and guidelines for the nation's foreign exchange market.
A capital market executive, Samuel Showunmi, has urged President Bola Tinubu to address the naira depreciation and deal decisively with violators of forex guidelines and framework.
The expert stated this in an interview with newsmen, noting that the government must immediately come out with new reforms, regulatory frameworks and guidelines for the nation's foreign exchange market.
Showunmi, an executive at Iron Global Markets Limited, a subsidiary of Iron Capital, an Africa-focused investment banking franchise based in Africa with a representative office in London, said there should be both short and long term solutions to solving the depreciation of naira.
He said, "What we must understand is that there is need for political wills and the President has to take his stand. Everyone's action and inaction has an impact on the value of the local currency and for some of us in the private sector that believed so much in imported goods, we are also killing the value of the local currency. For every Nigerian that doesn't patronise local manufacturers, we are contributing to the devaluation of local currency and improvising the poor masses because if the disparity between naira and other currencies continue, we are inviting poverty.”
"There are no simple or quick fix measures. The measures must be a consolidation of different strategies and policies. The government must quickly come out with FX reforms policy and I know that the Central Bank of Nigeria (CBN) is working on a new regulatory framework for the FX market but I will want to advise that we don't delay too much because delay can be dangerous.
"Currently, what it means is that we don't have any FX regulatory guidelines in place so people are technically taking the rules into their hands and doing whatever they like but when laws come in, people will understand dos and don't regarding their activities in the market. Also, CBN will start their surveillance, monitoring and enforcement.
"In the last few weeks, CBN has been saying it’s moving some of its key departments to Lagos. It's a strategic move and I think market operators should be aware of this because it's a move that is tilting towards CBN trying to move closer to the market and that tells us that the reforms and guidelines will soon come out and when the guidelines is out, CBN is closer to the market and surveillance, monitoring will follow suit then enforcement.
"That is smart, but I will advise that we don't delay the regulatory framework. It should come out on time especially now that they have moved base to the theatre of operations and trying to set things in place which is a very good one. This means CBN is prepared and they know what to do and that will address some of the issues we are currently experiencing in the short term," Showunmi stated.