OLUSOGA AND OTHERS PROVIDE SOLUTIONS TO FX ISSUES.

Oluseye Olusoga, group managing director at Parthian Partners, and other panelists at the Nigerian Economic Summit (NES28) encouraged Nigeria to get back on the productivity track to prevent currency crises.

The panelists discussed “Monetary Policy Management In Challenging Times” in a breakout session at the Nigeria Economic Summit.

Speaking about the causes of Nigeria's forex problems, Olusoga asserted that transferring responsibility among government entities is not the answer. He urged for the monetary and fiscal policies of the country to work together in a way that will make the country focus more on output.

According to him, pressure on Nigeria's currency arises when foreign investors enter the country to purchase its assets and demand foreign currency in order to bring their money home, which has been distorting the country's FX market.

He asserted that when foreign money enters a nation but does not boost productivity, it is no different from rent-seeking. The naira is a complex system that is undergoing upheaval. The fact is that we will be impoverished if we don't produce.

Naturally, our reserves will rise as soon as we are able to manufacture, have exports with value added, and provide services. The volatility will persist as long as we don't create.

Other panelists during the discussion made the case that unless Nigeria fully utilizes the potentials built into the non-oil sector of the economy, she may not be able to combat her inflation head-on.

According to Mrs. Saratu Umar, Executive Secretary/Chief Executive Officer of the Nigeria Investment Promotion Commission [NIPC], Nigeria must direct investment into non-oil sectors in order to attract significant foreign currency inflows.

Oluseye Olusoga, group managing director of Parthian Partners, urged Nigeria to get back on the path of productivity in order to prevent foreign exchange (FX) crises during a breakout session at the recently concluded 28th edition of the Nigerian Economic Summit with the theme, “Monetary Policy Management In Challenging Times.”

According to him, pressure on Nigeria's currency arises when foreign investors enter the country to purchase its assets and demand foreign currency in order to bring their money home, which has been distorting the country's FX market.

“When foreign money enters the country and doesn't boost production, it's no different from rent seeking,” he said. The fact is that we will be impoverished if we don't produce.

Our reserves will naturally rise once we are able to produce and offer exports and services with value added. The volatility will persist as long as we don't create.

Other panelists during the discussion made the case that unless Nigeria fully utilizes the potentials built into the non-oil sector of the economy, she may not be able to combat her inflation head-on.

According to Mrs. Saratu Umar, Executive Secretary/CEO of the Nigeria Investment Promotion Commission (NIPC), Nigeria needs to direct investment to the non-oil sector in order to receive significant foreign exchange inflows. Umar emphasized that the non-oil sector should also get remittances from the diaspora and pointed out that portfolio investment has never in any way benefited the nation.

“Nigeria boasts a wealth of cash crops, including cocoa, coffee, cotton, groundnut, cassava, hides and skins, among others, that, if properly harvested and processed, may boost the country's foreign exchange revenues and, consequently, its foreign reserves and gross domestic product” (GDP).

In addition, Engr. Mansur Ahmed, a past president of the Manufacturers Association of Nigeria (MAN), noted that while the COVID-19 epidemic had an impact on manufacturing around the world, the federal government's participation had allowed the sector to remain resilient. He claimed that if the government hadn't stepped in, there would have been greater issues in the sector.