NLC cautions Buhari on subsidy removal, Naira devaluation



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NLC cautions Buhari on subsidy removal, Naira devaluation
Posted on: June 28, 2015, 11:06:29 PM

Nigerian Labour Congress, NLC, has warned the new administration of President Muhammadu Buhari, to be wary of policy dictatorship of some vested interests aimed at undermining his electoral promises of putting an end to mass poverty and transforming the country’s economy and society to prosperity.

SUBSIDY-EXPRESSThe Deputy President of the union, Issa Aremu, who gave the warning, said the Buhari led administration must resist the new emergency discordant voices pushing for twin-evil policies of oil subsidy removal and further devaluation of the Naira.

“The two amount to policy dictatorship and policy ambush that have nothing to do with the ruling party’s electoral promises which the masses overwhelmingly voted for,” he said. Aremu added that there should be no group for any attempt by individual or body to usurp the legitimate functions of the Central Bank of Nigeria, CBN.

“NLC particularly rejects the call of the Managing Director and Chief Executive Officer of First Bank of Nigeria Limited, Mr. Bisi Onasanya for further devaluation of the Naira already in a free-fall of 18 per cent against the dollar in the past year.

“Market operators like Mr. Bisi Onasanya, should not usurp the legitimate functions of the CBN as the regulator through unhelpful policy dictatorship.

“We hereby support the recently announced bold measures of the Governor of CBN, Mr. Godwin Emefiele, in managing the scarce foreign reserve through foreign-exchange restrictions on some frivolous imports. “CBN should reject the least resistance of unhelpful option of further Naira devaluation,” he added.

He further stated that the existing currency devaluation had further eroded wage income of millions of workers (many with unpaid monthly salaries). “Devaluation has also increased the cost of domestic production, fuelled price inflation and undermined the competitiveness of locally surviving industry leading to loss of existing few jobs.

“Nigeria more than any nation currently suffers huge capital inadequacy, with nation’s foreign-currency reserves sharply fallen by some 27 per cent to $29 billion since the end of last September,” he said.

He argued that the CBN measures aimed at capital application and capital control, in line with its statutory objective, would definitely enhance domestic production in place of unhelpful luxury imports.

Aremu added that such a policy would also save the nation the current capital flight averaging some N1.3 trillion ($6.5 billion) a year, (almost half of national budget) on avoidable unnecessary job-killing imports.

“Indeed, CBN should include African prints textile materials in its foreign exchange restrictions. Nigeria has comparative advantage in production of African prints. It is bad enough to illegally lift the ban on its import but it is worse that we spend scarce foreign exchange on what we can and must produce locally,” he added.


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