Without drastic economy management change, Nigeria’s foreign reserves’ll continue to go down, naira to fall more – Ubani, financial expert

Kogiflame
Kehinde Emmanuel, ilorin
Chief Examiner for The Chartered Institute of Bankers of Nigeria (CIBN), Mr. Ubani Uchechukwu Ubani, has said that except there is a drastic change in the way Nigeria’s economy is being managed, the nation’s foreign reserves will continue to go down.
He added that the value of the naira will also continue to fall.
According to him, his two new books: Breaking the Shackles of Poverty: Foundation and Building Blocks for Lasting Wealth; and Internal Controls in practice: Armour against frauds, business and financial failure; could provide guidelines to solving some financial and business challenges of the country, corporate organisations and even business concerns of individuals.
Ubani, who is currently the Managing Consultant, BVL Investment Trust Ltd; a former National Auditor, Committee of Chief Inspectors of Banks in Nigeria; former Chief Inspector, Capital Bank International Plc now merged into Access Bank Plc during 2005 consolidation, and former Managing Director/Chief Executive Officer, Peniel Microfinance Bank Ltd, in an interview on Sunday also called for urgent strategic measures to address Nigeria’s economic and other developmental challenges.
He called for better management of Nigeria’s foreign reserves.
Ubani said, “This is an aspect of our economy that people read a lot of political meaning into, but we have a body or institution charged with the responsibility of managing our foreign reserves and that is the Central Bank of Nigeria (CBN). The Central Bank of Nigeria is not operating in isolation; it must work hand in hand with the fiscal policies of the Government. The government provides the fiscal policy, while the CBN comes up with the monetary policy. The two must have a firm handshake for the economy to run smoothly. When we talk about foreign reserves, we cannot remove the extent of our foreign reserves with the productivity of the economy. A lot of instability is impacting negatively on the productive capacity of the Nigerian economy. Major among these are insecurity problems are Boko Haram, herders/farmer conflicts, banditry, kidnappings, etc. Agricultural production has been drastically hampered.
“The Nigerian economy is import-dependent. The major foreign exchange revenue-earning product remains crude oil. There has been a fluctuating fortune for the oil industry due to unstable international oil markets as well as the impact of the COVID 19 pandemic. Since the government is not generating enough revenue locally, that is why they are depleting the foreign reserves on a consistent basis to remain afloat. The consequences are what you are seeing in the value of the Naira and the level of inflation in our economy. So because foreign reserves are maintained in United States Dollar and our foreign exchange which will go to fund the imported goods and services is nose-diving. That is why the cost of goods that are being imported is also rising and we are suffering from imported inflation coupled with a low level of local productivity.
“So for our foreign reserves to rise, there must be efficient management of the local economy. There must be adequate revenue or income to fund the government. As long as there is not enough revenue to fund the economy, the government will have to continue to borrow and dip hands into the foreign reserves. That is why we see that the rate of Naira to a dollar has been on the increase or that our Naira depreciated or practically been devalued because our foreign reserves are still being depleted. So if the Government continues in the present trajectory, it will even go down further and the value of the naira will fall further and there may be run-away inflation whereby you have naira and you will not be able to buy goods and services because the naira will become worthless. But by the grace of God, I believe we will not get to that point.
“The current monetary and fiscal policies being applied if they continue, the naira will depreciate further except there is a drastic change in the way the economy is managed, the foreign reserves will continue to go down, and the value of the naira will continue to fall. People are even complaining bitterly that vegetables such waterleaf and pumpkin leaf (ugu), which they used to buy for between N50 – and N100 is now going for about N1000.00 to 1,500.00. That will tell you how far the value of the naira has sunk and it is the consequence of the lack of accrual of foreign reserves and it is being depleted for non-productive purposes. If the foreign reserve is being invested in productive ventures that will bring in growth in the economy then we will be seeing a positive trend but because it is consumptive and most of the government expenditures are recurrent expenditures which are consumptive, they are not impacting the economy positively.”
He added, “When we look at the negative description as the poverty capital of the world, it is very unfortunate because looking at the circumstances of this country, Nigeria, indeed, has no business being referred to as the poverty capital of the world. This is because we have everything to make this country, one of the richest and happiest places in the world where people should live. But, it is unfortunate that leadership has been the bane of this country. We have not been privileged to have leaders who are selfless. We have rulers that are very selfish and that has led to the mismanagement of the national resources. People do not go into government or even some public offices with service to the people in mind, people go into government with their selfish interest, not for the good of the majority. That is why Nigerians are suffering and Nigeria has now become the poverty capital of the world. It is completely a problem of lack of focus of the leadership and mismanagement of the national economy. Of course, that mismanagement has impacted negatively on the citizens. When we look at Nigeria today, we see that the challenges we are facing: whether Boko Haram, out-of-school children, Yahoo yahoo boys, insecurity of any type such as kidnapping, banditry, farmers/herders ‘clash, etc all of them boil down to the fact that people are desperate for resources and they are ready to do anything to make money. And more so because the poor masses now idolize those who have stolen, mismanaged, or diverted our resources for their personal aggrandizement. That is why Nigeria today is in a very sorry state because the leadership has lost control of whatever is called governance.
“But on the basis of that, we discover that if someone is determined and disciplined, one can make a difference in his life and in the life of his family. While we blame the leadership for putting the country in this present predicament, any individual or family that is poor will also have themselves to blame for not doing what they are supposed to do.
“Why I wrote thes book: Breaking the Shackles of Poverty: Foundation and Building Blocks for Lasting Wealth, is because I discovered from personal experience that no matter how much somebody earns, no matter the circumstances of your birth if you are determined and disciplined and you are ready to make necessary sacrifices, you can build wealth from ground zero to the top.
“While many people are poor today is simply because of a lack of discipline, to discover the information that will liberate them from poverty. People are very lazy in reading or searching for information and some people will search the information but lack the discipline to apply the information.
“In this book, there is a place I said, that for you to make effective use of the information provided in this book, there is a formula that has been provided. It is information plus action equal to wealth. So the essence of this book is to arm people with relevant information that will liberate them from poverty if they are willing to apply these pieces of information. These are universal principles. Everybody that has followed these principles or patterns has always come out of poverty into wealth. A principle can only work for somebody that applies it. And you cannot apply what you do not know. So there is a need for people to be disciplined and determined and be willing to apply or make use of available information to save them from poverty.
“My book: ‘Internal Control in Practice: Armour against Frauds, Business, and Financial Failure; is situated within the financial services industry whose services can be regarded as the lifeblood of the economy. Their services are built around money and this is what everybody is looking for and some people are ready to get this money by all means. That is where fraud comes in.”