Devaluation of Naira not an option, says Osinbajo

Vice president, Yemi Osinbajo yesterday said that further devaluation of Naira was not a solution to the current economic down turn in the country.

He however announces federal government plan to set up $25 b Infrastructural Fund which would be sourced from local and international sources including Nigeria’s Sovereign Wealth Fund. Osinbajo spoke when he received the Ambassadors of Italy Mr. Fulvio Rustico and the Canadian High Commissioner in Nigeria Mr. Perry John Calderwood in his office at the presidential villa, Abuja.

He also recalled that his principal, president Muhammadu Buhari had at different fora said that a further devaluation of the Nigerian currency was not healthy for the Nigerian economy.

He said “I don’t agree on devaluation and it is not that I am doctrinaire about it. In the first place, it is not a solution-we are not exporting significantly. And the way things are, devaluation will not help the local economy.

“What we need to do is to start spending more on the economy and then things will ease up a bit.”

The Vice President disclosed that already other sovereign wealth funds have indicated interest in the fund which would be used to address the nation’s decaying road, rail and power infrastructures.

He said “this is our approach to speeding up the country’s infrastructural development.”

 Osinbajo also restated that the current foreign exchange restriction is a temporary measure to ensure that “we don’t deplete our foreign exchange substantially,” at a time when the prices of oil in the international market is dropping.

He added that the restriction is also to bring some stability to the country’s foreign reserves without which Foreign Direct Investment, FDI, might be affected.

“I am not sure devaluation is the issue, but how to ensure foreign direct investment which is more useful”, he said.

Allaying the fears of investors who already have contracts and loan commitments, the Vice President also gave assurance that the federal government would work with the Central Bank of Nigeria to protect legitimate businesses from being affected by the current foreign exchange restrictions.

The Vice President also called for greater economic ties between Nigeria and the two countries even as he conveyed the appreciation of the federation government to the envoys.

Meanwhile, a delegation of top executives from Citigroup led by Mr. Jim Cowles also paid a courtesy call on the Vice President.