FG, Emefiele Defend FX Waiver for Hajj Pilgrims

0
  •  Sultan: change comes with pain
  •   Ogbeh: Boko Haram using fertilizer to make bomb

Olawale Ajimotokan in Abuja

The federal government has rationalised its decision to grant prospective Muslims that will perform the 2016 Hajj ritual in Saudi Arabia a foreign exchange concession.
A nationwide outcry had trailed the foreign exchange waiver of N197 to a dollar granted to the pilgrims as against the existing flexible rate of N400 to a dollar in the open market.

Abdulahi Muktah from the presidency said on Tuesday at sixth edition of the Town Hall meeting in Abuja that preparation for hajj is a process that takes four to five months, adding that pilgrims had been mandated since March to make payment for the exercise as at the time the new policy of dual exchange rate was not in existence.

Muktah said there was a discussion with the Central Bank of Nigeria (CBN) on March 18 where the case on the need to alleviate and remove the subsidy by government was made.
He said it was consequently resolved that government be allowed to apply the then prevailing exchange rate without putting any financial burden on it.

“I think it is very important to clarify this matter. The issue is that the hajj usually takes four to five months to prepare, not something you rush through overnight. We wrote a memo to government and I want to read the contents: ‘In view of the global economic realities and the need to take off the financial burden of providing the concessionary rate on government, the commission has sensitised the state boards at two different meetings held on January 11 and  March 12 over the challenges of enjoying concessionary exchange rates for hajj transaction which was first agreed that it was unrealistic at this material time, therefore, the commission is considerably sensitive to limit its request to government for the use of the prevailing  exchange rate of N197 to a dollar  for hajj 2016 related component.’’

He insisted that the transaction was concluded by the end of March by when pilgrims had already complied with the directives to pay to the hajj fares into CBN account at N197 to a dollar.

Muktah also said referring pilgrims to the open market to buy Basic Travellers Allowances (BTA) could result in a security challenge because of the risk that they can buy fake dollars, which could cause Nigeria a major embarrassment in Saudi Arabia.
He said under the immediate past administration, pilgrims enjoyed foreign currency waiver as they paid N160 for a dollar though the existing official exchange rate then was N197 to a dollar

“The issue  of concession as far as this government is concerned is not clear- in the past there used to be concessionary rate for pilgrimage service but not under this government. In fact over the years pilgrims enjoyed N20-N25 exchange rate waiver and there was no much noise about the concession. No body requested from government anything, we requested for is to allow pilgrims to use the existing rate at that time. Allowing pilgrims to go and buy their BTA at the open market may create a security challenge because of the risk and chances of buying fake dollars that may cause embarrassment to government over there, That is why we requested that the issue of exchange should be through the approved bank and it should at the official exchange rate without any concession by government,” he told the town hall audience.

The town hall meeting, a policy dialogue for good governance, which was organised by the Alumni Association of the National Institute (AANI), was chaired by the Sultan of Sokoto, Muhammed Sa’ad Abubakar III.

In his address, the Sultan noted that though Nigerians have the legitimate right to demand for ‘change’ he emphasised that changes as desirable are often difficult to realise as they come with difficulties and challenges.

“At times changes come with difficulties and challenges. We urge that both the governed and government must come with clean hands as Allah has enjoined all of us that after hardship, there will always be ease for those who persevere,” the Sultan said as he added an anecdote by Caliph Muhammed Bello, who once defined leadership about accountability to the subjects.

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, who was one of the panel of discussants made up of nine minsters, attributed the shortage of fertilizer at the beginning of the current planting season to a security report from the military that blamed Boko Haram, which was accused of converting urea fertilizer in bomb.

He said the development resulted in the deliberate policy not to distribute fertilizer to the northern part of the country for two and half months, causing the cost of fertilizers to escalate.

He said Nigeria’s ship began to aimlessly list in 1986 following the introduction of the Structural Adjustment Programme (SAP) by the military regime headed by General Ibrahim Babangida, describing SAP as the worst assault on Africans since the slave trade.

Ogbeh said the policy forced the naira to be devalued and the led to the opening up of the country’s borders to all form of foreign importations.

He said the trend was groundswell for the current exchange rate devaluation of the naira which stands at N400 to a dollar at open market.

He similarly put the current demand for dollars in Nigeria is N2.5 billion per week to import goods and $20 billion on food, lamenting that the situation is not sustainable
He said while the interest rate has made it difficult for farmers to assess loans, there is notable increase in agricultural yields this year in Jigawa, Enugu, Kebbi and Anambra, adding that government was thinking of restructuring the Bank of Agriculture, where every farmer will be a shareholder, while interest rate will be reduced to five per cent.

Finance Minister Mrs. Kemi Adeosun, noted that Nigeria had been heading in the wrong way consistently in the past seven years arising from increase in debt level, a GDP based oil receipt, capital deficit and unproductive economy.

She said when the current administration came on board, it inherited a wage bill of N165 billion per month which has been reduced to N159 billion, adding every month she was signing memo to remove people who had either died or no longer in employ from the pay roll.

She advised Nigeria to take a cue from USA, Britain and Ethiopia which all grew out of adversity, asking for the corporation of everyone to build a strong economy out recession.
Meanwhile, Emefiele has neither the bank nor the federal government subsidised foreign exchange for 2016 hajj pilgrims.
Earlier, the CBN released a circular showing that 65,167 pilgrims were getting forex at N197 to a dollar, which is against the current foreign exchange policy.

The presidency had denied the subsidy, saying there was no discrimination against Christian pilgrims.

Corroborating presidency’s stance, Emefiele, who appeared on Channels Television yesterday, said the deal between the CBN and the pilgrims was consummated long before the new forex policy was implemented.

“Pilgrims made what is called advance payment for their personal travel allowance, in this case $750,” Emefiele said at a press conference in Abuja.

“They make those advance payments to the state pilgrims board, and then the state passes it to the national body, who in this case has reached an agreement with the central bank about the appropriate rate that would be used.

“For 2015, it is important for me to go back. In 2015, when the market rate was 197, the pilgrims commission, Christians and Muslims, actually came to the central bank and agreed at N160 to the dollar, even when the market was 197. That was an agreement and a contract reached.

“For 2016, the pilgrims commission came to the CBN and we agreed that it had to be done at the market rate, which at that time was N197.”

Emefiele said it would be against business ethic to direct the pilgrims to pay the difference in the old and new forex rate, on a previously-signed contract.
“The contract was reached sometime around March and April this year. I would think it would be inappropriate at this time, because the exchange rate has adjusted, that we should go back to the pilgrims and pay the difference.