The President, Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe says negative trends in the Nigerian stock market is posing threats to Naira stability.
Gwadabe told newsmen on Monday in Lagos, that the development in the stock market and the political intrigues before the 2019 general elections was worrisome.
“This raises a lot of concern to investors as it may affect the relative stable foreign exchange market.
“The investors in the stock market are largely portfolio investors from international markets and will at any given time decide to dump their holdings.
“They are likely to move to the foreign exchange market for capital flight to other lucrative destinations.
“The portfolio investors are mercantile and capitalists in nature and, therefore, driven by profit motives,” Gwadabe said.
The ABCON Chief said that the build up to the 2019 campaign and politicking was also an albatross to naira’s continuous sovereignty.
He decried inaction of regulators and policy makers on multiple exchange rates, adding that it would continue to endanger the achieved stability in the foreign exchange market.
The financial expert said that ineffective link between different sectors and the formal and informal sectors also posed a challenge.
To wriggle out of this, Gwadabe said stakeholders’ engagement to attract other sources of foreign inflows like Diaspora remittances, Foreign Direct Investments (FDIs) and competitive export base was critical.
He urged monetary and fiscal policy makers to diversify interventions to other strategic sectors of the economy like services, exports, manufacturing, etc.
Gwadabe faulted the continuous mopping up of the naira, adding that it may not be effective in the long run as campaign spending would begin in earnest.
He, therefore, advised the CBN to come out with various interventions in all sectors of the economy and make concerted efforts toward the formalisation of the informal sector.