An Economist and Finance Analyst, Prof. Uche Uwaleke has suggested enactment of a ” buy Nigerian law” to navigate the economy from current foreign exchange crisis.
Such a legislation he opined will reverse Nigerians consumption pattern from foreign items to locally produced item, thus scaling down pressure on forex.
Nigeria economy is experiencing severe forex trading pressure against other international currencies. The local currency, the naira has lost substantial value against United States Dollar and British’ Pound sterling.
To stem foreign exchange rising tide, Uwaleke urged Nigeria government to enact a legislation that will compel change in citizens’ consumption behavior.
“We need a buy Nigerian law .It goes without saying that export- base diversification remains the only sustainable solution to the present fx crisis. The current strategy of the government appears to focus on the supply side involving borrowing dollars to improve liquidity in the near term. But it may not record any significant success except the unbridled demand for fx is dealt with.
“To curb the demand pressure, I suggest the government should compel a change in consumption behaviour by enacting a ‘Buy Nigeria law’ akin to the ‘Buy America Act’ of 1933 and recently the ‘Build America, Buy America Act’ of 2021. Also, Nigeria’s import data support revisiting and scaling up the CBN’s currency swap deal with the Peoples Bank of China”, he said.
He noted that given that the bulk of Nigeria’s imports are from China, it stands to reason, therefore, to explore ways of bypassing the dollars and settling these transactions in the Yuan.
This, he added was the idea behind the currency swap with China which was largely inadequate in size.
“In order to increase the stock of Yuan in our external reserves, Nigeria can issue panda bonds, which are bonds denominated in the Chinese Yuan and are considered cheaper than Eurobonds”, University Don suggested.
