Mr Otu Hughes, the Chief Investment Officer at Honeywell Group Limited (HGL), has called on the Federal Government to give the private sector clarity on forex.
Speaking to Nairametrics on the sideline of the 28th Nigerian Economic Summit currently held in Abuja, Hughes argued that Nigeria’s multiple exchange rate regime is problematic for investors.
According to him, if the government could give clarity on forex access, availability and rates, then the private sector can work around the situation.
Excerpts…
NAIRAMETRICS: What measures can the federal and state governments take to stimulate increased private investment?
Otu Hughes: I think for several private investors, the key issues are macro – what does inflation look like, what is the policy around forex both availability and access? Those are two key issues for investors, both local and foreign.
If the federal government can harmonise some of those things, try to harmonise the forex situation, and give people some clarity because it’s challenging when there is no clarity in the availability of forex to be able to do your business.
And at the same time, to work on the inflation to bring that down better, this begins to create some of the right enabling environment for people to be able to invest in. Create the right level environment at the macro level, once you create the right environment, everybody benefits.
NAIRAMETRICS: What challenges do you foresee in this regard, and how can the government forestall them?
Otu Hughes: Inflation is a global problem currently and a huge part of the food inflation comes from the war. That red basket, the region which produces a lot of the greens, is at war and it’s constraining how much is coming out of that area. Looks like there is some allowance for shipment out of the area, hopefully, that is going to help in bringing inflation down.
The floods haven’t helped a lot, this year locally, which will hurt the local production of food. We are gonna have to balance some of those things and the government will have to support some of the poor in that regard.
On the Forex, we have to improve our supply, there is only so much we can do on the demand side because we still need to import stuff to develop our economy. it’s not everything that we can produce locally.
If we can improve supply, hopefully, the government can work around solving some of these issues with oil production as there is theft going on there. improving supply could potentially be helped with some of these matters.
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