Further devaluation of naira’ll boost economy –Bank CEOs

Chief Executive Officers of major banks in the country say there has to be some adjustment in the present level of the naira, in terms of further devaluation, and re-opening of the market for activities to continue otherwise, the economy will be at a standstill.

The banks’ chiefs also called for restoration of liquidity to the foreign exchange market.

These key players in the banking, as well as others in oil and gas sectors also raised the alarm over the “disappearing” flow of funds into the banking sector as well as another round of fuel scarcity in the country.

The concerns were expressed on Thursday in Lagos at a conference, where the Chief Executive Officers of First Bank of Nigeria Limited, Zenith Bank Plc, UBA Plc, Mobil Oil Nigeria Plc, Seplat Petroleum Development Company Plc and Oando Plc were panelists.

It was at the CEO roundtable organised by Bloomberg and the Nigerian Stock Exchange.

The Group Managing Director/CEO, First Bank of Nigeria Limited, Mr. Bisi Onasanya, said the banks could not support the naira at the present artificial level of less than N200 in the official market, calling for further devaluation of the currency.

He said, “It is not sustainable, and the longer we continue to hold unto this, the more we send signals to the international market that we are not serious as a country.

“There has to be some adjustment in the present level of the naira. There has to be a re-opening of the market for activities to continue in the market otherwise, the economy will be at a standstill.”

The Group Managing Director/CEO of UBA Group, Mr. Phillips Oduoza, who was represented by the bank’s Executive Director, Treasury and International Business, Mr. Femi Olalokun, also indicated that there should be a little bit of adjustment in the currency given the current situation, stressing the need to diversify the economy, broaden the base of income and restore liquidity in the foreign-exchange market.

“I think we need to increase the rate of interest for funds to come in,” he said.

The First Bank boss also said the Nigerian economy was contracting owing to the decline in oil revenue, which account for about 85 per cent of foreign exchange and from which the totality of the country’s import bills are financed.

Onasanya said he was not surprised that the Central Bank of Nigeria decided to average out the cash reserve requirement between the public and private sector deposits, because in reality, public sector deposits had disappeared from the market.

On his part, the Group Managing Director/CEO, Zenith Bank Plc, Mr. Peter Amangbo, said, “The major challenge we are facing now is having the availability of this foreign exchange to foot the country’s import bills.

On their part, oil industry players, including the Chairman and Managing Director of Mobil Oil Nigeria Plc, Mr. Adetunji Oyebanji; Chief Executive Officer of Seplat, Mr. Austin Avuru; and Group Chief Executive, Oando Plc, Mr. Adewale Tinubu, all stressed the need to deregulate the downstream sector of the industry.

Avuru, however, warned that fuel scarcity might resurface in the next three weeks if the government did not have enough money to pay for subsidy.

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