Osinbajo’s ‘Naira devaluation’ statement over forex scarcity clarified

Vice President Yemi Osinbajo’s spokesperson, Laolu Akande has said that his principal was not calling for devaluation of Naira in his speech at the midterm review of President Muhammadu Buhari’s second term in office, office.

Akande who defended Osinbajo following the controversy that trailed his calls for the Central Bank of Nigeria to make the exchange rate reflective of what is obtainable in the market as the official exchange rate is artificially low, stated that the Vice President was only advocating for a forex policy that curbed arbitrage and corruption, thereby offering customers cheaper dollars.

The statement read;

“Our attention has been drawn to statements and reports in the media mis-characterising as a call for devaluation, the view of Vice President Yemi Osinbajo, SAN, that the Naira exchange rate was being kept artificially low.

“Prof. Osinbajo is not calling for the devaluation of the Naira. He has at all times argued against a willy-nilly devaluation of the Naira.

“For context, the Vice-President’s point was that currently the Naira exchange rate benefits only those who are able to obtain the dollar at N410, some of who simply turn round and sell to the parallel market at N570.

“It is stopping this huge arbitrage of over N160 per dollar that the Vice-President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40% profit!

“This was why the Vice-President called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.

“It is a well-known fact that foreign investors and exporters have been complaining that they could not bring foreign exchange in at N410 and then have to purchase foreign exchange in the parallel market at N570 to meet their various needs on account of unavailability of foreign exchange.

“Only a more market reflective exchange rate would ameliorate this. With an increase in the supply of dollars, the rates will drop and the value of the naira will improve.”

Noting that the problem confronting the economy on this matter is how to improve the supply of foreign exchange, the statement added that the problem would not be solved if mechanisms like the Importers and Exporters (I&E) forex window don’t work.

It added;

“If we allow this market mechanism to work as intended, we will find that the naira will appreciate against the dollar as we restore confidence in the system.”