Chairman of Zinox Group, Nigeria’s foremost integrated Information and Communication Technology (ICT) conglomerate, Leo Stan Ekeh, has lent his voice to the on-going debate over the calls for the devaluation of the local currency, noting that prevailing circumstances in the nation’s fiscal and monetary framework aligned to developments in the global oil market makes devaluation a needless venture at this material time.
Since the turn of the year, the country has had to contend with reduced government earnings from the sale of crude oil, with the current administration especially hard-hit by the dwindling prices of the commodity in the global market, prompting the Central Bank of Nigeria (CBN) to impose strict forex rules to save its reserves while battling the pressure from various quarters to devalue the naira.
Speaking at a reception organized in honour of his 60th birthday by a select group of ICT Media entrepreneurs at the Sheraton Hotel – Ikeja, Ekeh noted that it was too late to devalue the naira as the move will only serve to further impoverish the masses and plunge the country into a state of hyper-inflation.
“What do you think would happen to already stretched wage earners? Would their salaries be linked to rate of inflation as is the standard globally? As I speak a lot of states cannot pay the minimum monthly salary.
“If devaluation happened mid-last year it would have made sense and encouraged in-flows from investors but devaluing now would compound our already difficult situation and investors will only wait in anticipation of a further devaluation. It will rubbish our currency forever and strengthen the purchasing power of our trading partners,” he said.
Ekeh, who admitted that his company is one of the casualties of the current forex scarcity with increasing difficulty to meet overseas business obligations, believes Nigerians and Nigerian corporates have reasonably adjusted to the realities of the hard times with pains as most people are now prioritizing critical needs which should be the case most times. In his view, the dire situation has most importantly impacted common sense which is not too common in many Nigerians.
“It’s too late to devalue the naira at this point in time. I can see reason behind the refusal of the President to consider devaluation as it is a move that will certainly erode the buying power of the middle class and push millions of Nigeria already living below the poverty line into abject penury,” surmised Ekeh, who is also a renowned Third World Economist.
“The country is hugely dependent on imports as it were and with the status quo ante, any attempt to devalue the currency will only usher in inflation and leave the country at the mercy of the vested interests in the global economic set-up who have been voluble in their calls for devaluation.”
Rather than consider devaluing the currency, Ekeh counseled the government to explore other options which will shore up the value of the naira and make the country less dependent on imports as it used to be in the past.
“We should rather focus our collective energies on workable ideas and a sound framework on which to base the diversification of our present mono-economy to re-ignite the country’s hitherto-forgotten status as a continental exporter.
“This is the time to refurbish our school system and save from remittance of fees for the millions of Nigerians who do not have option than to school abroad. This is the time to create knowledge incubators around the country which does not cost much to empower Nigerians to create digital wealth which has near zero-incubation period. It is the time for us develop industrial clusters in major productive zones to supply the needs of Nigeria and reduce importation,” he posited.
Ekeh also predicted that if oil prices rebound to at least $50 per barrel, the administration of President Muhammadu Buhari will be one of the best placed in the history of the country to positively impact the lives of Nigerians.
“Trust me, at $50 per barrel the quality of life of today’s Nigerians may be better than when oil prices reached record highs of $115 per barrel because Nigerians now have a new mind-set to live real and well which wasn’t the case until few months ago. If the prices inches to at least $50 per barrel, I am confident that the government of President Muhammadu Buhari will be in a better position from a financial stand-point to positively impact the lives of Nigerians and guarantee rapid infrastructural development.
“This belief is down to the new-found air of accountability and probity in the polity coupled with the conscious effort to block leakages in the system which has strengthened the country’s capacity and empowered most of our critical institutions,” he affirmed.
Ekeh, whose 60th birthday coincided with the announcement of the Zinox Group’s investment in Xputer – a 21st century digital software company – disclosed that the investment was timely and in line with the ambition of building the single largest 360 degrees ICT conglomerate in Africa out of Nigeria and creating platforms for current and future Nigerian whiz-kids to alter their destinies.