Oil slump: Expert expects further naira devaluation soon

 Oyetunji Abioye 

CBN Governor, Mr. Godwin Emefiele

The United Bank for Africa Plc says it expects a further devaluation of the naira very soon and predicts that the development may make goods imported into the country more expensive.

The Executive Director, Treasury and International Banking, United Bank for Africa, Mr. Femi Olaloku, who stated this, advised the Federal and state governments to diversify the productive base and foreign exchange earnings of the country to overcome the economic challenges caused by the nation’s dwindling oil revenue.

He spoke during a roundtable organised by Bloomberg and the Nigerian Stock Exchange, a statement by the bank said.

“Dwindling oil prices around the globe poses serious challenges to a developing economy like Nigeria, hence the need for government to also consider various diversification options,” he said.

As a result, Olaoku emphasised the need to encourage local manufacturing of goods and inflow of foreign capital into the country.

However, he gave the assurance that the nation’s banks had been strengthened over the last few years and were now well positioned to fund new opportunities that the country might wish to explore as a result of the dwindling oil prices.

“We have a banking system that is today a lot stronger than what it was 10 years ago. Whether in power infrastructure, or in the agriculture, Nigerian banks have been able to meet the growing demand for funding,” he said,

The executive director advised the Federal Government to leverage the successful political change of power and the resulting increased foreign interest in Nigeria to drive economic growth.

While expressing optimism on the growth opportunities in the economy, Olaoku urged the fiscal and monetary authorities to put in place the right policies and measures to explore the increased potential of the economy.

The Chief Executive Officer, Nigerian Stock Exchange, Mr. Oscar Onyema, was also quoted as saying that it was important for banks to evolve strategies to boost the nation’s Gross Domestic Product.

“Nigerian banks will have to fashion out strategies to assist the country to wade through the various challenges that the dwindling oil fortunes present to the country,” the statement quoted him as saying.

The Head, Market Structure Strategy, Middle East Europe and Africa, Bloomberg L.P, Selloua Chakri, said Africa remained key to the success of the institution and that Bloomberg was committed to bringing transparency to the capital market to enable a more liquid market.

The Managing Directors, First Bank of Nigeria Limited, Mr. Bisi Onasanya, and Zenith Bank Plc, Mr. Peter Amangbo were also part of the panel.