The registrar of the Chartered Institute of Treasury Management, Olumide Adedoyin, has cautioned President Bola Tinubu’s government on the alleged plan to re-denominate the naira, saying it would threaten economic stability.
Mr Adedoyin said this in a statement on Tuesday against the backdrop of an alleged plan to re-denominate the naira.
He said a strategic focus on government investment for economic stability rather than currency re-denomination would suffice.
According to him, re-denomination may provide a temporary solution to the exchange rate fluctuation, but it does not address the root causes of the volatility.
The registrar noted that “re-denominating the naira could potentially undermine the confidence of investors, both domestic and foreign,” adding that the sudden change in currency denomination could lead to concerns about the stability of the economy and the government’s management of monetary policy.
He said the country possessed the resources necessary to navigate these uncertainties and foster sustainable economic growth.
Mr Adedoyin said naira re-denomination would only be seen as a quick fix neglecting the need for structural reforms and responsible fiscal policies, warning that it would create inflationary pressures on the economy, rounding up prices and recalibrating monetary values might lead to confusion and adjustments in the pricing of goods and services.
Mr Adesoyin warned all this could disrupt consumer and business behaviour, adding that the process of re-denomination involves significant administrative and logistical challenges.
“The costs associated with printing new currency, updating financial systems, and educating the public about the changes could be substantial,” the CITM registrar stressed.
Speaking on economic diversification and investment, Mr Adedoyin said it could be achieved by leveraging external financing.
Mr Adedoyin added that Nigeria could fund infrastructure projects, improve education and healthcare, and stimulate economic growth, pointing out that “this approach lays the foundation for sustainable development rather than focusing on a singular currency change.”
“Mr. President, I strongly believe that our country’s funds are sufficient to finance our activities and drive economic progress,” stated the CITM registrar.
(NAN)
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