Ministerial nominee from Abia State, Ukechukwu Ogah, has said the present official exchange rate of the American dollar to Nigeria’s local currency, the naira was reasonable.
He made the declaration on Wednesday while taking questions from Senators. The official exchange rate is $1 to N360 to the American dollar.
Ogah who was the first to be screened said the guided deregulation of the exchange rate was meant to guide against volatility of the rate, just as he cautioned against fuel importation which he noted was depleting our foreign reserves.
He said:” There is no country that allows its currency to be fixed. Every currency is usually being floated. If you decide to deregulate the Nigerian petroleum sector, especially the downstream, it must be a guided deregulation. You don’t allow everybody to dump on us because there will be an impact on our foreign exchange. So, we must guide our currency because our ability to guide it is what makes it go up and go down.
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“If we had in the past grew our foreign reserve, I can tell you our currency wouldn’t have gone the way it is today. I believe that with what is going on, the Nigerian naira at the price which it is today, is okay for the nation.”
Responding to a question asked by Senator Jubrin Barau (Kano State) on how to address the continued importation of refined petroleum products, Mr Ogah who is the Chief Executive officer of Masters Energy, a player in the downstream sector said the nation must take concerted efforts to resuscitate its four refineries and encourage private sector to build modular refineries.
He expressed grave concern over the indifference to local refining as he warned that a time would cone when there would be no money to fund capital projects.
“There is rot in our refineries. Given the opportunity, I shall go to the root. The best we can do is to have refineries work because importation is impacting on our foreign reserves. If there are people who don’t want the refineries to work, we should show them the way out. If we continue with importation, in the next 10 years, we won’t have money for capital projects.
Ogah confessed that players in the downstream sector players who have been granted licenses to establish refineries were wary of guaranteed source of crude oil. He expressed the hope that once the Petroleum Industry Bill was passed by the national assembly, it would stimulate investment in the industry.
“Once the Petroleum Industry Bill is passed, it will help the economy in ensuring that investors will come into the country. And once they have guaranteed crude oil. For now, it is like building a house and nobody comes in there. So it is very difficult for people to put their money when they know that there is no source of crude to use in operating their refineries. Most investors in downstream can’t recoup their investment as a result of epileptic policy. We need to create stability in policies so that jobs can be created both upstream and downstream.
“I can assure you that if given the opportunity, the four refineries in Nigeria need to work. Because we have done it in the private sector and I can tell you that it is something that is possible because you get people to do what you want to do. Our refineries can work because what we need is the will power.”
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