Renowned economist Bismarck Rewane says the raiding of Bureau de Change (BDC) operators by law enforcement agents in a bid to stop the free fall of naira is counterproductive.
Rewane, the Managing Director of Financial Derivatives Company Limited, stated this on Thursday when he featured as a guest on Channels Television’s Business Morning show, a segment on its station’s breakfast programme, Sunrise Daily.
Following the unification of forex rate by the Federal Government in June 2023, the Naira has been on a free fall, moving from N700/$1 to over N1500/$1 at the moment.
The government has been making all efforts to bring the forex exchange rate under control, including sending the Economic and Financial Crimes Commission and other law enforcement agents after BDC operators.
“This doesn’t happen in other countries, raiding market and all. You are only making it more difficult because there is what we call illicit premium in a currency. You leave them do what they want, a speculator can make money and a speculator definitely will lose money,” Rewane said.
“Allow things settle down and the true value of the currency will emerge. All these is what I call misguided enthusiasm of law enforcement agents is chasing shadows and is going to be counterproductive.”
He said that the market will be brought under control when the government intervenes by supplying enough dollars into the market.
“Let the market settle and when you have enough supply intervene. If the central bank wakes up today and say we are going to intervene with $500m, all the bureau de change will run into the bush because nobody will patronise them,” he said.
Maintaining that raiding BDC operators is not the solution to the forex crisis, the economist wondered what offence they have committed to warrant the raid.
“What is the offence that they have committed in the first place? I heard something like naira racketeering, mutilation of notes and all that, is that the problem? And I heard the BDC man saying that we will ensure that the rate will come down, were they the ones that ensured the rate went up in the first place?
“Market work when the supply is in excess of demand, the value of that currency appreciates, when the demand is in excess of supply the currency depreciates,” Rewane noted.
MetroBusinessNews: A strategic cross-reporting initiative.
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Services Sector Responsible For Nigeria’s 3.46% Economic Growth In Q4 Of 2023, Says NBS
Nigeria’s economy grew 3.46% the fourth quarter of 2023, according to the latest data from the nation’s National Bureau of Statistics (NBS) on Thursday.
The growth rate, the data bureau said, is lower than the 3.52 percent recorded in the same quarter of year 2022 but higher than the 2.54 percent recorded in the second quarter (Q2) of 2023.
The country’s economy also recorded 2.74 for the entire year of 2023, coming short of 3.2% projection by the World Bank and the 2.88% by the Central Bank of Nigeria, (CBN).
The driving force behind this growth in the final quarter of 2023 was predominantly the services sector, showcasing an impressive 3.98% growth and contributing a substantial 56.55% to the overall GDP.
The agriculture sector also contributed to the positive momentum, posting a growth of 2.10%, a modest increase from the 2.05% recorded in the fourth quarter of 2022.
The industry sector demonstrated robust growth at 3.86%, marking a significant improvement from the -0.94% recorded in the same period the previous year.
In terms of their contributions to the GDP, both the industry and services sectors played a more substantial role in the aggregate GDP during the fourth quarter of 2023 compared to the corresponding period in 2022.
However, on an annual basis, the GDP growth rate for the entire year of 2023 settled at 2.74%, showing a slight decrease from the 3.10% recorded in 2022.
This performance underscores the complex dynamics at play in Nigeria’s economic landscape during the specified period.
While the fourth quarter of 2023 showcased resilience and growth, the annual comparison points to a moderate deceleration in the overall economic expansion in 2023 compared to the preceding year.
MetroBusinessNews: A strategic cross-reporting initiative.
