New Telegraph

Ex DPR boss proffers solutions to exchange rate volatility

Retired Deputy Director of the defunct Department of Petroleum Resources, Engineer Sunday Babalola, has said that domestic production of goods and consumption of commodities produced in Nigeria will greatly help to address the current foreign exchange volatility. In an interview with New Telegraph over the weekend, he stated that everybody should be involved in getting a solution to the current abysmal fall of the naira to dollars and other currencies.

Noting that it was painful the level of the devaluation of the naira, he stated that there was the need to address insecurity so that Nigerians can farm, produce and agricultural commodities. Babalola said: “It is sad that the economy is down, naira has fallen drastically to the dollars and other currencies, inflation has risen, there is hardship in the land and heightened insecurity. “Solutions to these challenges are not the work of President Bola Tinubu Alone. It is the work of all of us because we should be encouraging the purchase of locally made goods. As long as we bought rice, beans, toothpick and everything from abroad; as long as the Nigerian woman prefers the makeup that is from overseas; for as long as we all prefer the imported goods, we will also remain in this tattered state of the economy and foreign exchange volatility because we are going to use the foreign exchange to purchase them. We will always have a need for foreign currency. “Our appetite has to be reduced. Let us start to patronize our own, whether they are made in Aba, Kano, or Kwara. I went outside the country with a former boss of mine who is now late. We were talking about where to buy CDs and he said, I will buy my compact discs (CDs) when I come back to Nigeria from Alaba, Lagos. Somebody said, that is not good, it will spoil very soon. He said you will buy your own for $30 and I will buy my own for N150 in Nigeria. When it spoils, I will go and buy it again at N150. By the time I buy 30 of them, I am still below the man who bought the original one from the US. And it is the same music that I will hear.”

He stated that some people feel that local goods may not be of the same quality but, he added that they will serve the same purpose. He urged Nigerians to look inwards and buy things that are made locally. He noted that the appetite of many Nigerians for more foreign currencies will reduce drastically with local consumption. He added that when this is reduced drastically, the economy could stabilise. He said that people used to import many things including sand and build houses in this country. According to him, that does not make any sense. He called for the encouragement of the indigenous manufacturers. Babalola said: “We have cement factories. Our energy must improve because it is affecting the manufacturing sector. The manufacturers must be encouraged. They must have access to funds. How do they get their funds? Not at 30% interest rate. I spoke with a professor friend of mine in the past. He said there are three things that control the economy: exchange rate, interest rate and inflation rate. You cannot take the three of them. So, you have to pick two that you are going to manage and then allow the third one to run along. But whichever you pick, it will affect the third one. “In government’s thinking, if they think they can peg foreign exchange, inflation rate and think that will affect the interest rate, but it has never happened like that. “It is not what President Bola Tinubu will do alone, all of us must join hands and we must be ready to make our sacrifices. As long as we are demanding the dollars, we are going to keep having this same problem.

“Many people send their children overseas for education. There is medical tourism, people used to come to Nigeria for those things before. What has changed? As long as that thing that changed is not corrected, we will keep having the same problem. “The reality is that many people are culprits. I have seen colleagues of mine when we were doing projects who will buy up to toothpicks and toiletries from overseas. They said that Nigerians are also importing it, I said come home and buy the ones that are imported so that he can have money and the money will circulate locally. We all have to wake up, from the Presidency to the last man on the street. If it is possible, they can start importing sand. That is sad.”

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