Forex remains challenge for Nigeria’s economy – Control Risks insists
Control Risks, has insisted that the foreign exchange crisis, which has affected naira for the past few months, remains a major setback for investments inflow into the country.
According to the company, Control Risks which is an independent, global risk consulting company, the development is keeping investors on the sidelines, as there are elevated fears that devaluation might catch up with investments. Doubts were also raised over the source of the rising profile of the Nigeria’s FOREX reserves, saying it does not inspire confidence, as its sustainability cannot be ascertained.
Gillian Parker, who is an Africa analyst at the company said the challenge of repatriating profits by companies is a concern and explained that holding down the devaluation option will only inflict more pains.
Associate Director, Timothy Cox, while speaking on the matter also said Nigeria’s challenge is creating a diversion from the oil economy and harped on the need to get started with the diversification plan.
As much as the diversification plans are good, he said the situation looks hard in the immediate, given that it is a long-term programme, with infrastructure challenges like power, while there are urgent needs.
Timothy admitted that the country’s tax system is undiversified and offers potential, but reiterated the need for policy choice that would ease the FOREX issues.
The uncertainty in U.S. foreign policy raises a lot of concern on its commitment to the region in terms of trade and aids and that would certainly have a significant impact in sub-Saharan Africa.