President Muhammadu Buhar
• Job creation, oil prices, forex scarcity to top agenda
• Naira reverses gains, slides to N330/$
Tobi Soniyi in Abuja and Obinna Chima in Lagos
As the Nigerian economy continues to reel from low oil prices and its attendant consequences, presidency sources confirmed yesterday that President Muhammadu Buhari is set to convene a major national economic conference next month.
One official in the presidency said the president himself would declare the conference open and participate in deliberations with government officials, the legislature, and the private sector.
The decision by the president to hold the economic conference may not be unconnected to the growing clamour by Nigerians of influence on the need to stem the economic slide through a public discourse where participants could air their views and proffer solutions on the measures to stem the economic decline.
One of such calls was from Nobel laureate, Prof. Wole Soyinka, who expressed grave concern over the precipitous decline of the Nigerian economy and called for an “emergency economic conference”.
Prior to Soyinka, a conference of similar magnitude was also mooted last month at the 65th National Economic Council (NEC) meeting. NEC is a constitutional advisory council to the president.
At the January 28 meeting, the state governors, CBN Governor, Mr. Godwin Emefiele, Secretary to the Government of the Federation, Mr. David Lawal Babachir, and some ministers, among other top government officials called for a major conference where the current economic fundamentals would be thoroughly discussed by the states and federal government with inputs from the private sector.
With the approval of the conference by the president, the presidency official said the views of private sector and non-state actors would also be sought with the inclusion of local experts, as well as global experts who are expected to aggregate the views of other governmental, intergovernmental and non-governmental institutions.
The NEC retreat, as it is being called by the federal and states governments, became imperative against the backdrop of low oil prices, and their direct and significant impact on the funds that are shared by the three tiers of government from the Federation Account.
For instance, the federal, states and local governments, for the month of January shared N370.4 billion a few days ago at the Federation Account Allocation Committee (FAAC) meeting, compared to N387.8 billion shared the previous month.
Relative to the N629 billion shared in January 2015 and N503.6 billion in December 2014, it showed that FAAC allocations in one year have almost been halved due to lower earningsfrom crude exports.
Another concern of the federal and state governments necessitating the economic conference is the drop in foreign reserves, which have fallen to below $28 billion and compelled the CBN to adopt stringent forex measures, including the ban of certain items from accessing forex through the official window of the market and the rationing of forex for eligible items.
The depreciation of the naira has also been a major cause of concern for policy makers and the generality of Nigerians.
It is the expectation of the president, according to the presidency source, that the conference/retreat would be solution-centred and also create the platform to rally the nation, the federal government, states and the private sector towards a clear and mutually beneficial economic direction.
A government source involved in the planning of the conference billed tentatively for March 10-11, said: “It is interesting that a respectable Nigerian recently raised the idea of a national economic conference earlier this month – the same idea that had already been mooted by members of NEC at their January meeting. It shows there is indeed a wide consensus for the idea.”
Although government is not calling the conference an emergency one, it is clear that both the federal and state governments had agreed on the need to discuss frankly and develop innovative ways to take the country out of the economic challenges of the day.
The source explained that while the federal government is clear on what direction it intends to drive the country economically, there is need to rally the entire nation, including the need to call all tiers of government and the citizenry to tighten their belts and prepare for sacrifice.
The president, he said, had set the tone for frugality by cutting off routine security votes, among other cost-cutting measures. “Besides, zero-based budgeting and the Treasury Single Account (TSA) are part of the attempts by the federal government to stem leakages and ramp up revenue,” he added.
When contacted, the media aide to the president, Mr. Femi Adesina, said he had not been briefed by the president on the conference, but did not rule it out.
With the possibility of a high level conference on the economy on the cards, the hope among analysts who welcomed the public discourse was that the uncertainty over the naira, which yesterday reversed some of the gains recorded against the dollar in the last three days, would be addressed.
The naira clawed back some of its gains when it fell to N330 per dollar at the close of business in Lagos yesterday, weaker than the N300 to the dollar on Wednesday.
THISDAY gathered that the naira climbed to N290 to a dollar yesterday afternoon, before it later succumbed to demand pressure and weakened to its closing value. Currency traders blamed the volatility to the activities of speculators in the market.
CSL Stockbrokers Limited, in an analyst report, said the unpredictable nature of the parallel market revealed that it does not reflect the true value of the naira.
According to the stockbroking firm, “Our point is that the parallel market lacks information. Nobody can say how liquid it is, though clearly it employs hundreds of mallams in Lagos alone. There is no data as to who supplies it with US dollars, or who buys them. In its current state it behaves like a fledgling market.
“One thing was perfectly demonstrated yesterday: the parallel market does not show the naira’s true value or fair value. It is much too volatile for that.”
The CBN said recently that speculators were behind the gyrations in the parallel market, where the naira sink to an all-time low of N400 to the dollar last week.
Emefiele accused speculators of colluding with some bureau de change operators to undermine the efforts of the central bank to defend the naira, warning that they would be punished by the market eventually.