The chief executive officer of the Major Oil Marketers Association of Nigeria (MOMAN), Clement Isong, has said that the federal government needs to find a way to move the foreign exchange (FX) held by speculators into the economy to stabilise the market.
Isong said at the time the government was implementing the merger of the multiple exchange rates, there should have been a credible economic management team that would encourage persons holding the dollars to invest it for better returns.
Isong told TheCable that the responsibility of the economic team would be to shore up confidence that investing forex in business is more profitable than hoarding it.
“The dollar has got to bring more value if I am trading with it than if I am holding it. If I am holding it as a speculator, and it continues to bring more value, cause |(sic) it continues to grow, then there is no motivation for me to use it rather in doing business (or) in investment,” Isong said.
Acknowledging that the government has now taken the step of having a credible economic management team, he said there is also a need for the federal government to do more with the country’s oil resources than just exporting crude oil.
According to Isong, Nigeria would get a higher value selling refined products than the country would get selling crude oil, “and that will help stabilise the dollar”.
Isong said another key decision that needs to be taken by the government to stabilise the exchange rate is increasing the country’s productivity.
He explained that doing more with the crude oil, such as increasing production output to 1.8 million or 1.9 million barrels per day and refining the product is also part of boosting productivity.
“…if I were to take this petroleum, turn it into fertilizer, turn it into refined products – sell within Nigeria, what we can sell, export the rest; we would get a higher value than what we are getting now, because the productivity will be more,” he explained.
Isong said taking these steps will enable the government to manage the inflows and outflows of the dollar to keep the exchange rate stable.
