Explore other currencies for foreign trade, UNILORIN don urges FG

A former Director, UNILORIN Business School, University of Ilorin, Prof. Gafar Ijaiya, has advised the Federal Government to utilise other currencies in its international trade transactions to save the nation’s economy from absolute reliance on the US dollar and ease the impact of a high exchange rate on the economy and the Nigerian people.

 Prof. Ijaiya, who teaches at the Department of Economics, University of Ilorin, gave this advice penultimate Saturday (February 10, 2024) while featuring on a radio programme in Ilorin, which was monitored by UNILORIN BULLETIN.  

The renowned academic, while noting that the country should stop blaming the economic situation of the country on the unfavourable exchange rate of its currency to the US dollar, suggested that the country should by-pass the American currency since the majority of its international trade transactions are done with China and other Asian countries.

 He said, “You cannot continue to blame the exchange rate. Nigeria has been turned into a US dollar economy. So, we’re at the mercy of the US Dollar and the question is, why continue to rely on the US dollar while more than 90% of what we import into this country come from the Asian countries”.

He further noted that “Since more than 70% of our imports come from China, why not bypass the US dollar. Do we have to go through the dollar market before we change our money to Chinese Yuan before buying things from China”?

“Now, some Muslims are preparing to go to Makkah, (on pilgrimage) the National Pilgrims Board has said Muslims should begin to pay part of the money as a down payment and a deadline has been given to pay almost Five Million Naira. Can’t we bypass the US dollar and go straight to Saudi Riyal? ” he queried.

Prof. Ijaiya maintained that Nigeria should take cue from other countries who are already doing this.

He insisted that “bypassing the US dollar is possible, other countries are doing it.’’

Prof. Ijaiya recalled that during the Buhari administration, there was an arrangement for a currency swap with China but regretted that the political will and commitment to implement the policy could not be mustered.

He explained that “The leadership of the country needs to have that strong political will and independent mind to make decisions just like other countries have done in recent times”.

He said, “Just a month or two ago, Saudi Arabia and China had a bilateral currency swap agreement worth about $ 6 billion to bypass the US dollar. The United States could not do anything about it.

“When we were removing subsidies from petrol, Kenya did the same thing, there were demonstrations in Kenya and before you know it, the Kenyan President approached the Saudi Arabian Government to accept their Kenyan shillings for payment for petrol. That solves the problem of a hike in petroleum prices in Kenya”.

Prof. Ijaiya also said that an international body called BRICS, which comprises Brazil, Russia, India, China and South Africa, are now trading amongst themselves bypassing the US dollar.

He added that Egypt has joined as well as other African countries. Nigeria is yet to join BRICS. He encouraged Nigeria to join such a body in the interest of the nation’s economy.

The foremost scholar recalled the use of counter trade (not different from barter trade) as a means of international trade transactions by the military administration of General Muhammadu Buhari and General Tunde Idiagbon, which bypassed the US dollar and set Nigeria on a path to prosperity.

He regretted that the policy was unfortunately abandoned by the succeeding administration of General Babangida, which went on to introduce the Structural Adjustment Programme (SAP), an IMF and World Bank programme with devaluation, privatisation of government enterprises and removal of oil subsidy as some of its conditions.

Prof. Ijaiya maintained that SAP precipitated the nation’s economic challenges, which it has found difficult to get out of.

He added that the country’s economy can be strengthened when the real sector, which includes agriculture, mining and manufacturing are revived as he also stressed the need for the revival of manufacturing industries in the country.

Prof. Ijaiya also stressed the need for the state and local governments to oversee the mining sector, noting that the sector would perform better if it is not solely under the exclusive list of the Federal Government.

 He added that every state in the country could cater for its needs with the natural resources it has if it had the power to control the resources within its jurisdiction.

The Professor of Economics also called for improved security to help boost the agriculture sector so as to ensure food security.