Devaluation: NLC Calls on FG to Increase Palliatives

  • Says CBN’s $150 million not sufficient to save the naira from depreciating

Paul Obi in Abuja

The Nigeria Labour Congress (NLC) on Thursday in Abuja urged the federal government to increase its interventions by way of palliatives as measure to curb the negative effect of devaluation of the naira recently effected by the Central Bank of Nigeria (CBN).

NLC President, Comrade Ayuba Wabba, stated this in a statement to appraise the devaluation of the naira by the CBN.

He said: “As part of the process of managing the economy, the Central Bank of Nigeria recently announced a cocktail of measures or guidelines, including the following:

“Free and unfettered access to export process via inter-bank rates by non-oil exporters; possibility of the emergence of a single market as the primary and secondary markets move closer; retention of the 41 banned items on the ban-list; Primary dealers to operate the interbank market;

“Long-dated forwards (6-12 months) to be issued by CBN for enhancement of liquidity; CBN will no longer determine the cost of forex. This will be determined by the market, etc.

“In plain language, the CBN has devalued the Naira once again, proof of which is that within 24hours of this policy announcement, the Naira in the primary market exchanged to the Dollar at N245 (from N197)) while in secondary market, the Naira exchanged to the Dollar at N 285 (from N364).

“While this movement raised a ray of hope of convergence of the markets, the incontrovertible truth remains that, for now Nigerians will have to pay higher for goods and services and commodities without a commensurate rise in salaries, pensions or other earnings.

“An unexpected liquidity pressure came upon the money market as the interbank rate surged to 60 per cent from 18 per cent. This pressure will be passed on to borrowers who will equally pass it on to consumers. This is another source of burden to Nigerians

Wabba explained that “the intervention of the CBN by way of $150 million was not sufficient to keep the Naira from depreciating.

“In view of the above, we call on the government to devise palliative measures to cushion the harsh effects brought on the average Nigerian by this new turbulence.”
The NLC president added that these measures should operate at various tiers of government or sectors of the economy and could be short term or long term.