ICAN Applauds unification of exchange rate

*Says Action Will Lead To Long-term Gains

By Abubakar Yunusa, Abuja

The Institute of Chartered Accountants of Nigeria (ICAN) has applauded the unification of the country’s exchange rate.
The Institute said that it is expected that the action will generally lead to short-term pains that will yield long-term gains.
ICAN in a statement signed by Dr. Innocent Okwuosa, its 59th President provided some recommendations to ensure that the desired objective of the policy is achieved and there is growth in the Nigerian economy.
The Institute calls for timely appointment of a new CBN governor who will provide a credible long-term direction for the policy.
He said this will provide certainty and stability, and boost investor confidence to inflow capital into the country.
He stressed the need for effective and consistent implementation of the policy, stating that this will ensure that no uncertainty is created by the mode of implementation and that there is constant communication with key stakeholders such as businesses and investors amongst others.
The statement also recommended for a review of the prohibited list of goods to ensure demand is not segmented.
According to him, “This should be complemented by adopting appropriate fiscal and/or trade policies where necessary, for example, by increasing import tariffs, following a data driven analysis and robust stakeholder engagement.
Other recommendations according to the statement are to, “review and amend certain tax laws that require taxes to be paid in foreign currency thereby creating artificial demand for foreign exchange.
“Complement the policy with fiscal reforms and discipline, that is, removal of the petrol subsidy (which was recently executed), reduction in the cost of governance, harmonization of multiple tax laws among others.
“Benchmarking the Nigerian foreign exchange market with emerging international foreign exchange markets such as Malaysia, Mexico, South Africa, Brazil and Colombia including learning lessons to achieve macroeconomic stability and integration into global value chains.
“Supplementary policies and initiatives to boost supply, which should include increase in our crude oil production to meet OPEC quota, local refining of petroleum products to reduce our import bill, and incentives to aggressively revamp our agricultural and manufacturing sectors for local and exportation purposes.
The ICAN President however said that the floating of the exchange rate is not a silver bullet, that the government should minimize the negative short-term impacts in order to realise the long-term benefits.
He said ICAN stands ready and offer its support to the government in the efforts to move the country forward.