The president of the Institute of Chartered Accountants of Nigeria (ICAN), Dr. Innocent Okwuosa, has urged the government to minimize the negative short-term impacts of the floating of the exchange rate in order to realise the long-term benefits.
In a Position Paper on The Unification of The Exchange Rates in Nigeria he said the Institute of Chartered Accountants of Nigeria stands ready and offer its support to the government in the efforts to move the country forward.
He said due to the high exchange rate premium, the foreign exchange market was exposed to corrupt practices exploiting the arbitrage.
This led to artificial demand for foreign exchange thereby widening the foreign exchange premium, increasing the cost of raw material, driving up inflation, complicating the ease of doing business.
ICAN said the unification of the Nigeria foreign exchange rate is still at its early stages of implementation but has nonetheless been greeted with positive reactions from the investment and professional communities.
Noting that the new policy is applauded by the Institute of Chartered Accountants Nigeria, It is expected that this action will generally lead to short-term pains that will yield long-term gains, the Institute called for timely appointment of a new CBN governor who will provide a credible long-term direction for this policy which will provide certainty and stability, and boost investor confidence to inflow capital into the country.
The Institute called for effective and consistent implementation of the policy. This will ensure that no uncertainty is created by the mode of implementation and there is constant communication with key stakeholders such as businesses and investors amongst others.
Other recommendations are the rreview of the prohibited list of goods to ensure demand is not segmented.
This should be complemented by adopting appropriate fiscal and/or trade policies where necessary, for example, by increasing import tariffs etc., following a data driven analysis and robust stakeholder engagement.
The Institute also called for rreview and amend certain tax laws that require taxes to be paid in foreign currency thereby creating artificial demand for foreign exchange as well as complement this policy with fiscal reforms and discipline as well as removal of the petrol subsidy (which was recently executed), reduction in the cost of governance, harmonization of multiple tax laws and Benchmarking the Nigerian foreign exchange market with emerging international foreign exchange markets such as Malaysia, Mexico, South Africa, Brazil and Colombia including learning lessons to achieve macroeconomic stability and integration into global value chains.
It also called for Supplementary policies and initiatives to boost supply which must include must include increase in our crude oil.
Post a Comment
Sorry we need to know that you are not a robot.