Association of Capital Market Academics of Nigeria (ACMAN) has called on the Central Bank of Nigeria (CBN) to revisit the currency swap arrangement with China in order to reduce significantly the dependence on US dollars for imports from China.
It expressed concern that the forex market has remained illiquid, and volatility in the exchange rates has persisted despite the naira float policy that followed the unification of exchange rates.
ACMAN observed that the parallel market premium has continued to widen seemingly defeating one of the objectives of the naira float.
Professor Uche Uwaleke who is the President, Association of Capital Market Academics of Nigeria, disclosed this on Wednesday in Abuja when the group spoke on “The Capital Market and President Tinubu’s first 100 days in office”.
The association stated that on the supply side, a lasting solution remains to embark on deliberate efforts to diversify the export base, noting that unlocking value in dead assets is one way to improve the country’s fiscal liquidity.
ACMAN encouraged the new administration to speed up the process of privatising government enterprises, including the NNPCL, not by selling to a few individuals or companies but through the capital market for transparency and inclusiveness as well as explore asset securitization as a means of financing developmental projects.
Professor Uwaleke said, “ACMAN is concerned that the forex market has remained illiquid and volatility in exchange rates has persisted despite the naira float policy that followed the unification of exchange rates.
“To make matters worse, the parallel premium has continued to widen seemingly defeating one of the objectives of the naira float.
“In view of the continued huge chunk of imports from China, we are of the view that the CBN should revisit the currency swap arrangement with China to a scale that reduces significantly the dependence on US dollars for imports from China”.
Meanwhile, ACMAN said the government should give support to the CBN in the implementation of the RT 200 programme especially in relation to port reforms while it works on the ease of doing business to pave way for increased foreign investments.
It noted with concern a recent memo by FTSE Russell, in which the Subsidiary of the London Stock Exchange (LSE) disclosed its reclassification of the Nigerian stock market index from Frontier to Unclassified market status citing difficulty by international institutional investors to repatriate capital from Nigeria.
ACMAN stated that this is a premature move on the part of FTSE Russell, which has not allowed sufficient time for the forex reforms introduced by the government to mature.
It recommended the setting up of a Capital Market Advisory Committee (CMAC) comprising capital market experts in the Industry and the Academia whose mandate will be to provide research-based advice to the Minister of Finance on PPP arrangements and various financing opportunities in the capital market.
ACMAN commended a number of actions taken by the President since assumption of office notable among which is the appointment of Mr Wale Edun as the Minister of Finance and Coordinating Minister for the Economy.
It advised the President to move speedily to ameliorate the pains brought on vulnerable Nigerians on account of the sudden removal of fuel subsidy, which should include scaling up the interventions in MSMEs and Agriculture as the current size of the total package is very small, at less than N1 trillion.
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