FALL OF THE NAIRA : LABOUR, NIGERIANS REACT
FALL OF THE NAIRA
LABOUR, NIGERIANS REACT
The Nigerian Naira has continued on an uncontrollable
decline in value against other currencies, especially the American Dollar,
since the inception of the present administration. This development has left a
lot of Nigerians worried and apprehensive.
Industrialists and manufacturers have been under pressure as
Forex availability and exchange rates have become a daunting challenge.
The naira’s depreciation in the parallel market has been
attributed to an increasing forex demand that does not equate to supply from
the Central Bank of Nigeria.
This decline has further led to manufacturers struggling to
get raw materials, with more companies planning to sack more workers or shut
down. With the declining naira value, manufacturers are faced with cutting
production, jobs, and raw material imports.
Many Nigerians have expressed concern over the unrelenting
trend.
The major trade unions, NLC and TUC, have lent their voices
to this impending crisis.
The Nigeria Labour Congress on Sunday lamented the devastating
impact of the forex crisis on the economy and demanded urgent stabilization of
the naira.
The NLC President, Joe Ajaero, who said this in a statement
on Sunday, blamed government officials’ love for foreign luxury products for
the free fall of the national currency.
Ajaero warned that the economy was at risk of “a wave of
devastating consequences” if the naira failed to stabilise against the American
dollar.
The NLC president’s warning came ahead of the organised
labour and the Federal Government’s meeting scheduled to hold on Monday, 31st
October.
In a statement titled, “Urgent action to stabilise the naira
amidst alarming depreciation,” the NLC president, said repercussions of the
weakened currency would be felt by workers and the masses.
The NLC urged public officials to remain patriotic and
refrain from the purchase of foreign products.
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The Trade Union Congress, TUC, expressed regrets over the
debilitating effects of the slide in naira value on workers, through inflation.
“This alarming trend, if left unchecked, threatens to unleash
a wave of devastating consequences on the Nigerian economy and its citizens.”
“As a nation heavily reliant on imports, Nigeria is particularly
vulnerable to the adverse effects of a weakened currency. The Nigeria Labour
Congress wishes to emphasize that the repercussions of this crisis will be felt
acutely by workers and the masses, leading to an unbearable surge in inflation
rates.”
‘’The potential chaos and suffering that may ensue from such
a scenario are quite frankly, unimaginable.”
The Nigerian Employers Consultative Association NECA, also
lamented that free fall of the naira was shutting down businesses in the
country.
Nigeria Employers' Consultative Association (NECA) is the
umbrella organization of employers in the Organised Private Sector of Nigeria.
It was formed in 1957 to provide the forum for the Government to consult with
private sector employers on socio-economic and labour policy issues.
The Director-General of NECA, Adewale Smatt-Oyerinde, said:
“The free fall of the naira against other currencies is quite worrisome. It is
a huge concern for organized businesses as it directly affects the cost of
doing business.”
“It is instructive to note that many organizations still
source their materials and machinery from overseas, using dollars as the means
of trade.”
‘’As the value of the naira plummets, the cost of buying
these inputs also increases, with consequential effect on the ability of the
business to create wealth, address welfare issues and create jobs.”
“The unrestrained taste of our public officials for products
manufactured outside the shores of Nigeria is grossly unpatriotic and lays our
economy prostrate and our nation tottering on the brink of disaster.”
‘’This penchant is one of the most contributory factors to
the apparent high coefficient of imports which has had devastating effects on
the value of the naira. It is unhealthy for public officials in various
capacities to reward themselves with tools that are imported from outside our
shores.”
“We are, therefore, surprised that rather than patronize
these brands, our public officials insist on the use of foreign products yet,
we want the value of the naira to remain robust in the foreign exchange market.”
‘’The simple maxim is that, you cannot have your cake and
eat it. It is either we put our food where our mouth is or we end up destroying
our economy with our hands.”
Analysts have also condemned the attitude of public officers
and the effect on the economic well-being of the nation.
“This action of our public officials de-markets the naira
and is one of the most dangerous factors sounding the death knell of the local
currency. We, therefore, call on all Nigerian public officials to be more
patriotic in their choices and favour locally manufactured goods.”
‘’The positive multipliers created by patronizing locally
manufactured goods is huge and is capable of jump-starting the critical sectors
of the nation’s economy but our refusal to do that has left the naira wobbling.
Every money spent on buying foreign made goods creates jobs outside the country
to the detriment of our labour market and puts pressure on the naira.”
‘’However, every amount spent on purchasing locally
manufactured goods, creates jobs in Nigeria, thus increasing employment,
elevating income, reducing poverty and much more reducing the pressure on the
naira as it encourages local manufacturers to increase production, raise their
standards and create better chances for export.”
Other commentators are of the opinion that all nations of
the world take pride in protecting their domestic currencies from all manner of
threats but the reverse seems to be the case in Nigeria. Why a country with
high import coefficient and a less than one elasticity of exports would allow
its local currency to be at the mercy of the vagaries of the so-called market
forces leaves us surprised and deeply worried.
This, they say, is despite all the wise counsel, warning
against the consequences of such actions. It is only an economy with a vibrant
and robust domestic manufacturing capacity that is export-oriented that will
respond quickly and effectively to a free-falling local currency, not one like
ours that is steeply bogged down by supply inertia and unable to meet domestic
demands competitively, let alone responding positively and taking advantage of
the falling naira.
Speaking in a similar vein, the Deputy President of TUC, Dr
Tommy Okon, said: “The continued free fall of the naira against other
currencies is nothing but plot by the International Monetary Fund, IMF, and the
World Bank to continuously impoverish Nigerians.
“It is sad that instead of encouraging our indigenous
industries to be productive, the Central Bank of Nigeria, CBN, decided to lift
the ban on the 43 items restricted from accessing foreign exchange to boost
liquidity in the foreign exchange market.
‘’As we speak, most of our local industries can no longer
cope because of importation of goods to weaken local industries.
“You are aware of the effort of the previous government to
boost our local industries. For instance, the rice mills and our local rice
were competing well in the market which were exported to boost foreign exchange
market but today, most industries would prefer importing rice to milling
because it could be cost-effective.”
On the part of workers and the masses, it is a sorry
situation because virtually everything has skyrocketed by inflation. The
workers are the worst hit because of the fixed salary and income, and there is
nothing tangible to cushion the effect of the free fall of the naira against
other currencies.
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