FG, states plan retreat on alternatives to devaluation,  economy

The Federal Government and 36 states governors have  oncluded plans to hold a retreat to consider alternatives to devaluation of the naira.

This was disclosed on Tuesday by the Governor of Kaduna State, Malam Nasir El-Rufai, at the day two of the Economist Summit on Nigeria.

Governors El-Rufai, Ibikunle Amosun of Ogun State and Umaru Tanko Al-Makura of Nasarawa State were keynote panelist at the summit.

According to El-Rufai,  the idea of the devaluation of the naira is one he does not support, making it necessary to find an alternative to devaluation.

El-Rufai said: “In my life time, I have seen three rounds of devaluation of the currency but right now, I am against it. I have clearly not seen the benefits of devaluation to us. Is parallel market the only way to solve the scarcity problem? I don’t think so.  The only value of devaluation is the removal of corruption in the distribution system.

“We will be having a retreat soon to look at other options other than the orthodox system of devaluation. We cannot continue to subsidise the elite. The elite did not vote us.

Lending his voice against devaluation,  Governor Amosun said he supports President Muhammadu Buhari on the issue of devaluation, adding that It is not good to devalue naira when Nigeria is still an import dependent nation.

Read also: FG pushing for freeze in oil production levels -Kachikwu

“Almost everything we import. So, let those who are importing source for dollar. We should have a secondary foreign exchange market, if you like call it parallel market”, Amosun said.

The governors also called for state governments to shrink the size of their governments and increase Internally Generated Revenue, IGR, to be able to survive the low revenue occasioned by fall in oil prices.

According to El-Rufai, the Federal Government has been supportive but at the end of the day, the states must help themselves, insisting that the states must shrink their size of governments.

Continuing,  the Kaduna State governor said states cannot keep running a government that they cannot afford and that they are not existing as a government only to pay  salaries of a very small percentage of the population.

“So state governments and the Federal Government must undergo significant belt tightening with a view to reducing cost and finding ways of enhancing revenue.

“In addition to reducing cost, we have to increase revenue of the state through the collection of tax. Our hope is that we would be less dependent on the federation account. We need to attract the private sector. We have some companies that are interested to come to our state and we are doing everything possible to attract them. The action of paying tax is part of the citizens responsibility, and so we are widening the tax base, El-Rufai said.

Governor Amosun however said his state has started out well in diversifying it’s economy with a view to increasing its IGR.

According to him,  the Ogun State government has started investing in the agricultural sector. He added that  in the five cardinal programmes of the state, the government is not just implementing an agricultural programme but one that will lead to industrialization, saying the days of engaging  subsistence farming was gone.

“Now we are not just talking mechanized farming, but also farming that will take full advantage of the value chain that agriculture offers. And what do we mean by that? It means that whatever we grow, we must process; whatever we process, we must market once the products are ready. So, it involves a lot of things like the presentation, the packaging, marketing, etc.”

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