The Registrar of the Chartered Institute of Treasury Management (CITM), Mr. Olumide Adedoyin, has issued a warning to the Federal Government regarding the purported intention to re-denominate the naira, cautioning that it could jeopardise economic stability.
Adedoyin conveyed this concern in a statement released in Abuja on Tuesday, addressing the alleged plan for naira re-denomination. He suggested that focusing strategically on government investment for economic stability would be more appropriate than pursuing currency re-denomination.
He explained that while re-denomination might temporarily address fluctuations in the exchange rate, it fails to tackle the underlying causes of the currency’s volatility.
The Registrar emphasised that re-denominating the naira might erode the confidence of both domestic and foreign investors. He further highlighted that a sudden shift in currency denomination could raise doubts about the economy’s stability and the government’s monetary policy management.
Adedoyin noted that Nigeria possesses the necessary resources to navigate uncertainties and foster sustainable economic growth. He argued that naira re-denomination would offer only a short-term solution, neglecting the necessity for structural reforms and prudent fiscal policies.
He predicted that re-denomination would contribute to inflationary pressures on the economy, potentially leading to confusion and adjustments in pricing for goods and services. Such disruptions in consumer and business behaviour, coupled with the administrative and logistical challenges of re-denomination, could create significant costs associated with printing new currency, updating financial systems, and educating the public about the changes.
Adedoyin advocated for economic diversification and investment through the leverage of external financing. He posited that Nigeria could finance infrastructure projects, enhance education and healthcare, and stimulate economic growth, promoting sustainable development instead of concentrating solely on currency manipulation.
He directed his plea to President Bola Tinubu, suggesting that the nation’s existing funds are sufficient to drive economic advancement. By focusing on wise government investments, Nigeria can harness its potential, insulate itself from external economic fluctuations, and establish a legacy of enduring growth for generations to come.
Adedoyin urged President Tinubu to consider this strategic perspective amidst the intricate economic landscape.
