A venture capitalist, serial entrepreneur, and managing director of Rearden Capital IMG, Segun “Rex” Ayo-Adebanjo, believes the naira can be saved by creating demand for the currency.
One way this can be done is by changing how the Federal Account Allocation Committee (FAAC) distributes revenue to the three tiers of government.
Ayo-Adebnjo says the FAAC policy has the most immediate effect on the naira demand and supply equilibrium.
“Those dollar receipts should be allocated to the federal government, states, and local governments in the dollars they are received, not as cash but an allurement to their CBN account with the CBN,” he said on Morning Crossfire on Nigeria Info 99.3 FM on Monday.
He thinks it is the most urgent action the government needs to take.
The venture capitalist criticized the Central Bank of Nigeria’s handling of foreign exchange.
“What you now have is the CBN doing voodoo to just determine the equivalent naira to print or issue for dollar receipt,” he said on Morning Crossfire on Monday.
He stated that a naira print that is not backed by productivity would naturally decline when you produce too much of it in an attempt to chase the dollar without considering its value.
“So you already have the productivity that backs that dollar that they have earned which is what the IOCs (international oil companies) are doing,” he added.
“That is reviving the dollar.”
He stated that the naira has to be backed by value. He added that the value could come from what Nigeria has in its gold reserve, but more importantly, from economic productivity.
Raising productivity, he said, would come from more people getting into full employment.
Ayo-Adebanjo advised the government to invest in education, security, and mass employment.
