Association of Bureaux De Change Operators of Nigeria (ABCON) has called for elimination of fuel and foreign exchange (forex) subsidies in order to address structural defects in the economy.
The association made this call in its Quarter Economic Review report for the second quarter of the year, stressing that these subsidies represent structural defects in the nation’s economy.
Speaking at the presentation of the report, its President, Aminu Gwadabe, said: “The subsidies are misapplications which have resulted in the creation of economic rents in various dimensions, as well as maladjustments in sectoral business structures, creating hyper-unemployment rates which have triggered unmanageable social unrest like kidnappings, terrorism, banditry, arm robberies and large scale cultism etc”.
“We recommend that government should consider the following: Policy of single exchange rate to completely remove forex economic rent and subsidy for a medium and long term adjustment of the economy from distortions occasioned by decades of subsidy. We must observe that we have an inefficient structural system to track surreptitious flow of foreign exchange within the platforms, notwithstanding that the morals to control are lacking.
“This hydra-headed fuel subsidy issue should be addressed headlong by critically reorganising the sub- sector, including deregulation and decentralization of fuel importation to ensure competition necessary to guarantee fair price”.
Stressing the need to tackle youth and graduate unemployment, ABCON called for an extension of the National Youth Service Corp (NYSC) period from one year to two years, with provision to allow discharge after one year if employment is secured.
The Association commended the Federal Government for signing the Africa Continental Free Trade Agreement (ACFTA) agreement but called for measures to enhance the competitiveness of local industries to maximise the benefits for the economy.
ABCON also welcomed the proposed consolidation of the banking sector with new minimum capital requirements, describing it as, “a necessity that will help in reducing the impact of non-performing loans on Capital Adequacy Ratio of banks and thus enhance their capacity to lend to the economy.”
Speaking on ABCON’s efforts to enhance stability in the forex market, Gwadabe said that the Association will leverage on its partnership with the Nigerian Diaspora Commission to harness the potential of the Diaspora remittance to enhance forex inflow and economic development.