As part of measures to
stenghten the naira and grow the local economy, the Cross River State Governor, Professor Ben Ayade, has advocated for payment of conractual fees and charges to multi-national companies in local currency/
Ayade, who stated this when he received the chairman and other members of Senate Committee on Petroleum Resources Upstream on a 3-day workshop in Calabar, said that it is by so doing that the emphasis on dollars will be less and the value for naira better appreciated.
“The dollarisation of contracts in the oil and gas sector is another crippling issue in this country. It is only in Nigeria that contracts are awarded in dollars and denominated in dollar.”
The international exchange rate is fast changing, a lot of people prefer to do business in their local currency, and we have countries that have made laws that stipulate a minimum irreversible exchange rate between their currency and the dollar; We should not be an exception.
He further argued that the activities in the oil and gas sector in the country which allowed for the sale of crude oil in dollars, with the dollar not returning to Central Bank of Nigeria was another issue which should be tackled under the local content law.
“With our main exports, we should not have this kind of exchange rate that we are having in naira today. It may be synthetic, it may be a little artificial, it could be black market induced but we have failed to establish a framework that can give the naira its value,” he said.
“Must we always put the naira against the dollar?” Ayade asked rhetorically, noting that, “in most countries like UK, some of their foreign reserves come in form of gold. Why must our foreign reserves be in our dollar, why can’t we commoditise our foreign reserves?”
The governor who reasoned that the country was blessed with abundant mineral deposits like bitumen, gold, iron, among others, stressed the need to convert these into foreign reserves in material terms and bring the naira to shore up its value.
Ayade urged the Federal Government to take a deliberate policy as well as ensure full implementation of local content act to strengthen the naira while advising that all LNG shipments sales out of Nigeria be paid to CBN directly.
Earlier, Chairman, Senate Committee on Petroleum Resources Upstream, Senator Tayo Alasoadura, said the choice of Calabar for the workshop was not misplaced because Cross River had over the years distinguished itself as the preferred destination in the country because of its ambiance and serenity.
He thanked the state government for partnering with the committee to actualise the workshop, saying that the essence was to meet minds with relevant stakeholders in the oil and gas sector in tackling some of the issues raised in the sector in a manner that would impact positively on the citizenry.
Friday Nwagbara, Calabar
