Economist and Policy Expert Dr Muda Yusuf has made a call for the complete revamping of the nations’ foreign exchange regulations to put an end to the disparity which currently exists between the official and parallel market.
Dr Muda Yusuf gave this advise while speaking to TVC News’s Tolulope Ogunjobi on Business News on the News at 7pm on Friday Night.
Dr Yusuf who reacted to the reported raid by the Economic and Financial Crimes Commission said the raid though within the purview of the functions of the Anti Graft Agency said the raid is trying to address the issues arising from a dysfunctional policy.
He added that the Federal Government through its relevant agencies should do a comprehensive review of the current Foreign exchange policy to address the dysfunctional nature that sees a disparity of about 350 Naira to the Dollar between the Official and Parallel market.
He added that the Federal Government needs to address fundamental issues of competitiveness, productivity and a sustainable Foreign exchange policy.
“Well, within the confines of the responsibilities of the EFCC, especially within the context of money laundering, perhaps we can excuse some of the actions that have been taken by the EFCC.
Well, it is important that these things are situated squarely within the confines of the rule of law. That is very key. But with respect to foreign exchange, I think there are more fundamental issues that need to be addressed and these issues are far beyond the purview of the EFCC.
First, there are the fundamental issue of productivity and competitiveness in the economy because it is through productivity that you can increase your capacity to earn foreign exchange. It is true productivity that you can increase the capacity of the economy for import substitution. That is one major fundamental thing that we need to deal with.
“Well, it’s certainly not sustainable and I was also developing the second fundamental factor that we need to deal with, which is related to the question you have asked. It’s about the dysfunctional foreign exchange policy.
“Particularly the disparity between the official window and the parallel market window. We are talking of a disparity of close to 350 Naira per Dollar that is clearly not sustainable and it’s creating a whole lot of distortions in the foreign , in market and it has also corrupted practically the entire value chain of the foreign exchange in the economy.
“There’s a lot of transparency issues now and part of the change that the EFCC is also trying to fight are consequences or symptoms of a wrong policy approach to the management of the foreign exchange”.
“So we need to look at this things in a much more fundamental way. If you continue to have this kind of disparity, it will continue to manifest in the kind of things you will see on the streets, people hawking dollar and the rest of them”.
“So we should go back to the drawing board, address the key issues of productivity, of competitiveness and of an appropriate and sustainable foreign exchange policy”.
“That is the way we can deal with this thing. All these ideas of going to arrest people and raiding is good for the cameras, good for some sentiment, but it cannot bring about a lasting solution to the problem”
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