Naira Will Rebound If Nigeria Returns To Fiscal Federalism— Prof Ekekwe

Professor Ndubuisi Ekekwe has said that the naira will rebound by more than 100 per cent if the country returns to fiscal federalism where regions can control their resources.

Ekekwe said the naira will likely appreciate to N650 per dollar.

Ekekwe said this in reaction to the federal government’s concluded plan to defend the currency.

On Friday, the currency closed at N1,600 at the Bureau de Change segment of the Nigerian foreign exchange market and N1548.25 at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

But the Central Bank of Nigeria has revealed 1,364 bureau de change operators that it wants to sell $20,000 weekly to in order to curb speculation.

The CBN has also withdrawn the license of 4,173 BDCs over alleged non-compliance to the bank’s guidelines on the filing of accounts and returns.

Ekekwe said, “I want to wish those serving the best of luck as they architect policies. The latest is that Nigeria wants to raise $10bn to support the Naira.

“Of course, anything that works is the best. Yet, I would also like to caution the nation to avoid a loop that could become a vicious circle where to fight today’s crisis, you need to raise money, and for tomorrow’s, more funds would be required at the debt market.

“My position on this will be to look at critical anchors and enablers that can ‘wean’ Nigeria of persistent currency paralysis. For a start, examine Nigeria’s fiscal architecture which has significantly affected our productivity and economic output. Indeed, can we consider looking at how to rearrange Nigeria?”

He argued further, “If the leaders in the nation march to the National Assembly with a document on full fiscal federalism which will be put into motion within six months, Naira will appreciate to N650/$. Fiscal federalism will follow with Regional Police (not state police) to combat vices that are territorial.”

There have been renewed calls for restructuring the country, which some argue would make the country more productive.

During the campaign for the 2023 presidential election, the winner, President Bola Tinubu, had promised restructuring. But last week, he said he is not in a rush to restructure the country.

The National Publicity Secretary of the Afenifere, Mr Jare Ajayi, quoted the president saying a good foundation must be laid before bringing the restructuring in place such that if it is done in a rush without a proper foundation, the restructuring may collapse very soon but it would be done.

“I do posit that we could return to that heritage if we organize around regions. The best “raise” to fight for Naira now is fiscal federalism where every region will keep whatever it earns, and pays taxes to the federal government,” Ekekwe added.