Vice President Yemi Osinbajo has criticised the foreign exchange policy adopted by the Central Bank of Nigeria.
Mr Osinbajo advised the bank to have a “rethink” about its current forex demand management strategy.
Speaking at the Mid-Term Ministerial Performance Review Retreat on Monday, he said the exchange rate is artificially low and does not reflect the current market realities.
Naira currently trades at N414 at the official market against the U.S. dollar, and N570 at the parallel market.
“As for the exchange rate, I think we need to move our rates to [be] as reflective of the market as possible. This, in my own respective view, is the only way to improve supply,” the vice president said.
“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is just my view.
“Anyway, all those are issues that when the CBN governor has time to address, he will be able to address in full.”
He lamented the lack of access to forex for the importation of systems and raw materials as one of the contributory factors of the current economic situation.
CBN/Ministries synergy on intervention funds
The vice president also said the CBN appeared to be in competition with government ministries and agencies in implementing certain policies.
While addressing the challenges of implementing the economic sustainability plan, the vice president called for partnership between affected ministries and the CBN. This he said will address the issue of people benefitting in more than one intervention programmes.
“There must be synergy between the fiscal and the monetary authority. We must be able to deal with the synergy, we must handle the synergy between the monetary authority, the CBN, and the fiscal side.
“Sometimes, it appears that there is competition, especially on the fiscal side. If you look at some of the interventions, you will find that those interventions are interventions that should be managed by ministries.
“The ministry of industry, trade, and investment should handle MSMEs interventions, and we should know what the CBN is doing. In other words, if the CBN is intervening in the MSME sector, it should be with the full cooperation and consent of the ministry of industry.
“Sometimes you will get people who are benefiting more than once because we simply have no line of sight on what is going on, on one side.”