The Institute of Chartered Accountants of Nigeria, ICAN has said that the Central Bank of Nigeria, CBN, and Nigerian National Petroleum Company Limited, NNPCL, should disclose the extent of unpaid foreign exchange bills and outstanding debt obligations to enable Nigerians know if the emergency $3billion crude oil repayment loan facility from Afrexim Bank will make a sustainable impact on the foreign exchange rate.
Also, the Institute recommended a postponement of the
implementation of non-critical dollar-denominated components of 2023 budget
until the FX situation improves.
In his recommendation paper titled: “The NNPCL $3billion
Afrexim Bank Borrowing, Naira Exchange Rate and Fuel Subsidy: Our Position”,
59th President of ICAN, Innocent Okwuosa, said that ICAN is ready to offer its
support to the government and other stakeholders in the effort to address
economic challenges and move the country forward.
He added that government must imbibe comprehensive economic
reforms, improve governance, policy consistency and make concerted efforts to
diversify the economy. The devaluation of currency should be the last resort to
the economic imbalance.
He said that accountability and transparency demand that the
cost of refining a litre of fuel locally or importing same is disclosed to
Nigerians, as any choice in this affects exchange rate and fuel price.
Okwuosa raised concern as to why NNPC is the channel for
obtaining the $3 billion loan rather than the CBN even as he pointed out that
there are some issues that need to be addressed.
On the medium-to-long term recommendation for FX demand
side, ICAN said: “Tackle inflation and reduce currency substitution on account
of low purchasing power of the Naira; Promote patronage of made in Nigeria
goods using enabling laws; Improve the standard of education and health
facilities in the country to reduce education and medical tourism; Encourage
companies operating in Nigeria to source raw materials locally via backward
integration; Fix the refineries to reduce import of petroleum products with
attendant reduction in FX pressure; among others.
On the supply side: “Diversify the export base especially
through agriculture and solid minerals; Set up a Fiscal and Monetary policies
Coordinating Committee to among others, ensure goal congruency and stability in
policies that address macroeconomic indices; Enhance Ease of Doing Business,
tackle corruption and insecurity to make way for increased FDIs; Recapitalize
NEXIM to be in a stronger position to incentivize exports; among others,”
Okwuosa said.