Aug 22, 2023

The Registrar, Chartered Institute of Treasury Management (CITM), Mr. Olumide Adedoyin, has cautioned the Federal Government on the alleged plan to re-denominate the naira, saying it would threaten economic stability.

Adedoyin said this in a statement in Abuja 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 said, “re-denominating the naira could potentially undermine the confidence of investors, both domestic and foreign.”

He added 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.

Adedoyin said naira re-denomination would only be seen as a quick fix that neglected the need for structural reforms and responsible fiscal policies.

He said re-denomination would create inflationary pressures on the economy, adding that rounding up prices and recalibrating monetary values might lead to confusion and adjustments in the pricing of goods and services.

He said this could disrupt consumer and business behaviour, adding that the process of re-denomination involved 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.

Speaking on economic diversification and investment, he said it could be achieved by leveraging external financing.

Adedoyin added that Nigeria could fund infrastructure projects, improve education and healthcare, and stimulate economic growth.

He said, “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.

He said by focusing on prudent government investment, Nigeria can tap into the nation’s potential, insulate the country from external economic volatility and create a legacy of sustainable growth for future generations.

He urged president Bola Tinubu to consider this strategic perspective as the country navigates the complex economic landscape. (NAN)