#DailyTrustDialogue: CBN forex allocation has no logic—Peterside
Chairman of Stanbic IBTC Atedo Peterside has faulted the Central Bank’s allocation of 60% of foreign exchange to manufacturing, noting it was failing the Nigerian economy.
In his presentation at the Daily Trust Dialogue Peterside said manufacturing accounted for only 10% of gross domestic product, whereas sectors that really shored up growth and production had to share a combined 40% of forex.
“There is nothing logical about 60% or 40%. It has no scientific basis. Investors have taken fright and taken flight,” he said.
In an analysis of what the government was doing right or wrong, Peterside faulted the lack of a deal with the Niger Delta militant.
He suggested a royalty payment to immediate host communities, correcting “injustice put into our laws”, he said instead of continually paying amnesty to agitators.
Failure to get a deal costs the nation N6 billion a year, he said, recommending a high-powered negotiation with representatives of proven track record from the region.
“How will you get justice? If you want to do business by ignoring the host community, you will face a different kind of militancy everywhere you go. Instead of depending on amnesty payment, which is a moral hazard,” Peterside said.
He noted Nigeria needed serious reform to harmonise fiscal policies and exchange rates instead of having different parties working in silos to get the country through recession and its problems.
“Few people want to take on the big gorilla in the room, preferring to scratch around the edges in silos,” he remarked.
Peterside praised current moves to cut overhead expenses in governance as right, but he said many things were also wrong.
“There is reluctance to completely break from the past and embrace significant economic reform even when circumstances demand so,” he said, nothing that the reluctance left the economy mired and not likely to witness any improvement in living standards for six to eight years coming.
“It is no use arguing who or what caused the recession or high inflation. It is far better to focus on what we need to do to get us out of this sorry state,” he said of setting reform goals.
“If you do what is necessary to achieve rapid economic growth, the chances are that you might achieve modest economic growth even when some of your plans fail,” Peterside noted.
