ICSAN and Stakeholders Concerned About Nigeria’s Dwindling External Reserves
By Ajiri Daniels, Abuja
The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) and public and private sector stakeholders have expressed grave concern over the alarming state of Nigeria’s foreign exchange reserves and its attendant effects on the economy.
According to the institute, Nigeria is currently nursing the twin diseases of over-reliance on declining crude oil revenues and raging insecurity; the latter fractured production and reduced exports.
The institute postulated that any nation dreaming of fattening its external reserves must be more export-oriented than heavily import-dependent like Nigeria. This, they say, has put the naira under intense pressure as importers continue to buy US dollars to import various goods consumed in Nigeria, resulting in a perilous exchange rate of the naira against the dollar.
These submissions were made during the ICSAN Annual Public Conference 2022 held recently in Abuja. The event on the theme: “Dynamics of external reserves and governance challenges”, brought together financial experts and key players from the public and private sectors.
Speaking in her opening remarks, ICSAN Registrar and Chief Executive Officer, Ms. Taiwo Ganiyat Olusesi (FCIS) noted that the aim of the conference was to bring all matters relating to external reserves to the forefront of the intellectual discourse from which useful recommendations can be made.
Professor Bongo Adi from Lagos Business School (LBS) addressed some of the key forces shaping the Nigerian economy in a keynote address. He asserted that national production structures, which are also a key factor in determining the value of the naira, are a function of sustainable foreign exchange earnings.
“It is important to note that the main sources of a country’s foreign exchange supply include foreign exchange earnings from exports of goods and services, monetary gifts, and capital inflows from abroad such as loans and Investments It is from these revenues that the demand for foreign currency is met to be spent on imports of goods and services.
“For Nigeria whose currency is not convertible or does not serve as an international currency, it must necessarily earn foreign exchange through high productivity and exports of goods and services, foreign borrowing and investment in order to import the goods and services necessary for the development of the country’s economy and improving the welfare of the citizens.In addition, high levels of foreign exchange earnings and external reserves are the backbone of the Naira exchange rate. provide stability in the rate while low levels weaken the naira,” Prof. Adi explained.
Speaking further, CEO of Emerging Africa Capital Group, Ms. Toyin Sanni (FCIS), Managing Director of NNPC, Litigation, Property and Environmental Law Department, Mr. Rufai Khalid (ACIS) and other speakers at the conference jointly stressed the need for Nigeria to create an export-oriented economy and look beyond dwindling crude oil resources for economic sustainability. They therefore called for prudent management of the economy and the commitment of all relevant stakeholders to revive the economy and strengthen external reserves.
In his remarks, the Minister of State, Labor and Employment, Mr. Festus Keyamo (SAN), while commending ICSAN for its role in economic and social development, also highlighted the measures put in place by the federal government to stimulate job creation and increase the country’s gross domestic product (GDP).
He attributed some of the current economic difficulties to global phenomena such as the COVID-19 outbreak and the global economic catastrophe, which have impacted economies around the world. However, he pointed out that the skills sector was crucial in closing the unemployment gap in Nigeria and increasing productivity.
He said, “There is no justification for the high unemployment rate we have in Nigeria because we are a very wealthy nation and we should be able to harness our natural resources to provide jobs for our people. What we’re trying to do is look at the skills sector. I think this is the key to unlocking the unemployment market in Nigeria.
“Overall, people are learning skills and becoming self-employed while the government provides the necessary resources, empowering them and giving them the start-up packages and they become self-employed. So we focus on that. At the Ministry of Labor and our agencies, especially the National Directorate of Employment (NDE), we have a lot of programs where we try to train Nigerians to become self-employed.