The first step toward improving and protecting the naira is the removal of fuel subsidy completely. Number 2, is the export of cash crops driven through the banking system and the introduction of export licenses to account for the value exported and foreign exchange generated.
Gradually we then move to the establishment of an agricultural export authority that will handle the export of cash crops to boost foreign exchange earnings for the government.
The third step is the repositioning of textiles trade from import to manufacturing, banning textiles imports on a gradual basis and encouraging textiles production in Nigeria. Then the fourth step is setting up a national airline to stem/reduce payment of foreign exchange to foreign carriers and create employment locally. Please note this is not a political decision but an economic one.
The fifth is encouraging the setting up of import substitution industries across the country through incentives and tax holidays for companies wishing to set up. To facilitate this, the government should set up industrial parks that would be supplied with power and water 24/7.
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The sixth is the protection of the local manufacturing base which is not only necessary but compulsory. Trade and investment are critical.
We must ban all goods that are locally produced/manufactured from being imported. Local manufacturers must be supplied with power 24/7 at a very affordable or even subsidized rate to continue operating and providing employment thus saving the national foreign exchange earnings.
Step number seven is the BDC reform. The current BDC’s licenses should be revoked/recalled immediately. The government (CBN) should advertise and license companies that can operate as FX dealers with a minimum deposit of between N500m – N1 billion depending on the size of the operation – state/regional/national.
The CBN should issue proper guidelines on their structure and staff for that purpose as well as operational guidelines.
The eighth is expanding foreign exchange earnings. In addition to crude oil which we must work hard to produce our quota of approximately 2.5mbd, we must commercialise our mineral resources for export such as gold, cobalt, lithium and other potential FX earners for the country.
Step nine is the attracting of foreign investment (tax/duty incentives). The government should identify and target key and important sectors of the economy such as power, agro-allied, mining sector and water resources with a view of rolling out incentives that will encourage investment into these sectors – both foreign and local investments.
The government should consider the following direct incentives for potential investing companies -:
– Low Duty or duty-free on machinery, equipment and spare parts, based on import reduction and employment generation.
– Tax Incentives – Low rate of corporation tax or even tax holiday for startup businesses in agro-allied industries and mining sectors which are currently in their infancy.
– Agricultural implements and machinery, spare parts, pesticides, agro-allied chemicals, fertilizer and improved variety of seeds in the agricultural sector should be duty-free for the next 10 years until the sector is fully developed.
– Trade in digital currency (Crypto), and the like should be completely suspended for now until further notice when we are able to stabilize our currency.
Step 11. Export of food crops for whatever reason should be suspended and any company or person or group of persons caught should be severely punished.
At step 12, government should invest heavily in food and health care instead of palliatives. Government should buy foodstuffs or release them from strategic reserves and sell them at 50% of the current market price to the public while providing free medical care for pregnant women, accident and banditry victims as well as malaria, typhoid, tuberculosis, ulcer and other common ailments patients.
Kabir Ahmed wrote from Abuja
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