Group managing Director of Global Fleet and NICON Group, Jimoh Ibrahim, has implored the Federal Government to start printing the naira as a bailout option for the economy not to go into recession.
Ibrahim, who is also a member of the business Support Group for the Vision 20 2020 said during a meeting with newsmen in Lagos on Wednesday that the development would support domestic spending.
According to him, "I strongly advice the Federal Government at this time to look at the possibility of printing the naira notes as an urgent solution to recession, if the naira is printed, it’s cost of printing will be reasonable as to the cost of depleting the foreign reserve or supporting domestic spending through foreign reserve withdrawal."
The Global fleet boss said, "If you print our naira now, we would be able to fund government spending, fund infrastructure and fund the seven point agenda. Definitely, printing naira notes will cause inflation, but this can be controlled by the issuance of treasury bills to mop excess liquidity."
He noted that printing naira notes will reduce interest rates, increase liquidity, banks will be well funded so as to fund companies, while properly funded companies will in turn not cut jobs even as capacity utilisation will increase and by extension, spending habits will be promoted and this will lead to increased activities at the stock exchange.
"In my view, it will be better to control inflation than to keep spending government reserve. Government is the largest spender in our economy and the moment they stop spending, the economy stop performing, cutting domestic spending as per federation account by 34% will lead to more pains and aggravate recession," he added.
However, a source at the Central Bank of Nigeria (CBN) while responding to the development said that would not be an option to be considered for now, adding that printing of currency should be a very last resort at very extreme cases.
The source said that the decision is that of the Federal government to take and not the central Bank of Nigeria.
He questioned the rationale behind the use of the external reserves to fund the foreign exchange market at the detriment of the naira noting that at this time of the year, the price of crude oil is expected to be giving us the highest returns because of the weather, but the converse is the case.
He noted that it is better to manage the inflationary trends that might arise as a result of the printing of currency than to grapple with a depleting external reserves as an option of bailing out the naira. The foreign exchange has gone down from about $63 billion in October last year to less than $53 billion now.