The PDP lawmaker representing Cross River Central in the National Assembly, lamented that a situation where the apex bank accounts for over 95percent of forex will weaken the Naira.
Enoh who made the call Thursday while speaking with journalists in Abuja on the way out of the recession, said government alone through the Central Bank of Nigeria (CBN) cannot sustain the market.
As of September 15, 2016, one United States dollar exchanges for N315 at the inter-bank rate, as against N419 at the parallel market.
According to Enoh, in reducing the continuous slide of the Naira at the parallel market, the CBN may have to lift its ban on 41 items from the foreign exchange market.
The CBN recently issued a directive stopping some imported goods and services from the list of items valid for forex in the Nigerian Foreign Exchange Markets.
The policy implies that those who import the items can no longer buy foreign currency from the official window to pay the overseas suppliers. Rather, they will have to source forex from the parallel market or Bureau De Change to pay for their imports.
Some of the banned items include: rice, cement, wooden doors, toothpicks
margarine, vegetables oil, meat and processed meat products, poultry chicken, eggs, roofing sheets, wheelbarrows amongst others.
According to the senator, the policy has led to further weakening of the Naira at the parallel market as a result of heavy demand for forex at the market by importers of the banned items.
He said: “The main challenge of this recession is sources of foreign earnings. If you go to the streets and they said that a dollar is N430 to naira and that is where the problem starts. So really, why is it so and we need to get back to the very fundamentals. We have transited from involvement in which there was a steadfastness in terms of having to fix the exchange rate for too long in terms of our international outlook it was very negative.
“We got to a point in which the Central Bank of course try to make it flexible and how many months after that policy the gap is still there. That means there is something wrong and that is there is something that is not being addressed, that means some of the expectations on the part of the policy makers in floating the exchange rate haven’t been met.
“The expectations was that if you float it and it will make it attractive. That means people with foreign capital are going to bring in because government alone cannot sustain the market. So far it’s government alone that is providing more than 97% of the foreign exchange that is bidded. That is where the problem is.
“They must close the gap and as long as that remains there is still going to be a continuing gap between the official rate and the parallel rate and that is where you are.
“That’s primarily elementary economics. As long as those who need the dollar far outweigh the supply side of it that is a little price seal as highly and then maybe we have come to a point in which the CBN has to look at those 41 items that they banned”.
He opposition legislator warned the ruling party to stop the blame game and deliver on its campaign promises.
“They are close to 18months after taking office. You can no longer validly talk about the former administration. You have to begin to talk about your own administration and face the reality on ground. The reality is that Jonathan handed over power in May 2015 with indices or economic indicators that were not as bad as we have them now”, he noted.
The Senate will resume on Tuesday September 20, where the economy is expected to top its agenda.
