Push Aside the Multiple Exchange rates - Prof Soludo to FG and CBN

Former Governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Charles Soludo, has asked on the federal government to push aside its policy of various exchange rates.

Prof  Charles Soludo

The former CBN boss claimed that was the only means to get Nigeria out of this terrible economic trials and get back on the pathway of progress.

According to The Punch, Prof Soludo said that policy makers must quash the present multiple exchange rates’ system and lessen the gap between the official and parallel market exchange rates of the country’s currency to a maximum of 3%-5%.

Prof Soludo praised the steps taken by the apex bank in the last few weeks to reorganize the forex market, but maintained that there was still miles to cover in bring back the economy to right track.

Soludo said: “With regards to exchange rate, I can see quite some changes in the last few weeks. I think some steps are beginning to be taken, but it is still quite a long way to go to get to a stable and predictable level that eliminates the premium among the multiplicity of exchange rates.

“Nigeria must get out of multiple exchange rates and we must eliminate the premium, get it back on track at a competitive exchange rate regime. The uncertainty that is created by that is so enormous; and with the oil price rising and with the increase in oil earnings, this is the time to take bold steps and do the needful.”

"On bold steps, the template is not too far. We have done it before and it is just going back to it. If it (the template) is not broken, why mend it? Get back and eliminate the multiple exchange rate regime, eliminate the premium, or at least significantly reduce it to not more than between three to maximum of five per cent premium between the parallel and official exchange rates.

“On what it takes to do it, that is basically known. Get the public finance okay; I can tell you that with the momentum of what is going on in the rest of the world, by the end of this year, we should actually be having stocks of reserves in the range of about $50bn or $60bn.

“And getting Nigeria structured and reengineered towards non-oil economy that again will require a lot more serious work. The recession is not the issue. We will get out of it in spite of government policy.

“I think this is a time Nigeria should actually be making hard decisions to transit away from an oil revenue economy and that’s the serious work.