FG envisages increase in foreign exchange supply

By Kayode Ogunwale

 

The Vice President, Prof. Yemi Osinbajo has envisaged that there will be increase in foreign exchange supply as a result of improvement in the receipts from non-oil export.

Prof. Osinbajo revealed this at the 2016 Presidential Policy Dialogue Session organised by Lagos Chamber of Commerce and Industry (LCCI), in Lagos.

The Vice President said, “there will be an increase in the supply of foreign exchange especially due to inward investment and increased receipts from non-oil exports.There is already anecdotal evidence that Nigerian agricultural products are being exported to neighboring countries in substantial quantities and credible sources in the banking sector have also informed us about incipient response in terms of portfolio and foreign direct investments.”

He noted that the recent introduction of a flexible exchange rate regime by the CBN has helped to ease the pressure on the external reserves.

In his word, “It is of course true that the immediate effect is depreciation of the Naira and some of the consequences for inflation, etc., but we expect that with the greater clarity we are seeing in the implementation of the policy by the CBN the foreign exchange market will stabilise, and confidence will be restored.”

We had also pledged to keep capital spending in the budget at a minimum of 30 per cent. This is a target that we are determined to keep since it is investment that grows an economy.
Accordingly, we have already made capital releases of N332 billion, which is more than the entire amount released last year for capital expenditure, with another N100 billion set to be released in the next few days, he said.

He however said, a great effort has been made to improve non-oil revenues; this includes bringing an additional 700,000 companies into the tax net as compared to the targeted 500,000 set at the beginning of the year.

“Non-oil revenue from both FIRS and Customs continues to lag behind projections partly due to seasonal factors and economic conditions. The FIRS has implemented VAT-COLLECT for auto-tracking and remittance of VAT, increased collaboration with State Governments in tax collection.
FIRS has achieved 73.17 per cent of its target for the first half of the year. In a similar vein, the Customs have undertaken substantial revision of incentives, control and enforcement measures.”

Speaking on government diversification efforts, the Vice President revealed that government has commenced the process of resolving issues facing agricultural sector of economy with the objective of ensuring that Nigeria is self-sufficient in food production particularly rice, wheat, sugar, maize, beans, soya beans, millet, sorghum, fish, vegetable oils, meat, milk, fruits and vegetables.

This has led to increased rice yields in Kebbi State from 3.5tons per hectare to 7.5tons per hectare, he said.

Also speaking at the dialogue, the President of LCCI, Mrs. Nike Akande said, “The present administration to promote economic diversification, stabilize the foreign exchange market and ensure sustainable supply of petroleum products need the right mix of policies to achieve the desired outcomes.”

She called for regular engagements and communication on policy issues to ensure quality feedback and enrich the policy making process.

According to her, this should cover macro-economic policies as well as sectoral policies. These will include foreign exchange, trade, tax, energy, transport, industrial, agricultural, ICT policy among others.