Rewane stated this on Tuesday in a keynote address at the
2024 Economic Outlook and Budget Analysis organised by the Lagos Chamber of
Commerce and Industry (LCCI) with the theme, “Building Economic Resilience in
2024: Strategies for a Sustainable Future.”
His words, “The naira is undervalued by 33.58 percent at the
parallel market rate of N1,285 per dollar and 4.16 percent at the NAFEM rate of
N890.54 percent.”
Specifically, he noted that the purchasing power parity
(PPP) value of the Naira in January was N853.46 per dollar, while the parallel
market price was N1,285, indicating an undervaluation of 33.58 percent, and the
NAFEM price was N890.54 per dollar, showing a 4.16 percent undervaluation.
He predicted that Nigeria is primed for 3.3 percent growth
in 2024 and projected an increase in the minimum wage for workers from N30,000
to N50,000 per month.
Rewane asserted that the main macroeconomic challenges
facing the country include suboptimal and non-inclusive growth, increasing
income inequality, high poverty, and a high unemployment rate.
Others, he noted, were spiraling inflation, widening fiscal
imbalances, and currency pressures.
On the way forward, he said that the government needs to
focus on policy changes that will steer Nigeria towards economic resilience in
2024.
According to him, the imperative policy changes include debt
rescheduling, increasing interest rates, a more efficient money supply, and an
efficient foreign exchange market.
Others are cost-reflective electricity tariffs, reductions
in petrol subsidy, and wage reviews.
He said the economy could only get better if there is
increased spending on infrastructure development, adding that deficit spending
has yet to yield the intended impact on the economy.
Rewane stated: “Key fiscal policy objectives would be to
stimulate growth output, boost employment level, ensure equitable distribution
of income and wealth, boost investment levels, and debt management.
“Major opportunities for policy changes include exchange
rate sanitisation, which would lead to reduction in export smuggling, boost in
global commodity supply, lower food prices.
“Opportunities for policy changes in increased tax rate and
efficient tax collection would lead to boost in state government revenue, paid
contractors and increased demand for cement and other commodities.
“Nigeria will also need to come to terms with its domestic
and external debt situation and is expected to begin talks with the IMF and
reschedule its external debt.”
He, however, cautioned that policy reforms without
institutional modifications would exacerbate the situation.
Earlier in his welcome address, LCCI President, Mr Gabriel
Idahosa, said policy reforms by the government, especially the removal of fuel
subsidies and floating of the exchange rate, are expected to boost fiscal
revenue and contribute moderately to the improvement of the country’s growth
this year.
Also speaking at the event, Director General, Budget Office,
Ben Akabueze, said one of the challenges facing the nation is that of low
public revenue against a growing population.
He said Nigeria has had over three decades of deficit
budget.
He shut down the opinion of some analysts that the country
needs to spend less, arguing that what the nation needs to do is to spend
efficiently and not less.
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