*Says stronger naira will cut food prices
By Michael Oche
The Trade Union Congress of Nigeria (TUC) has urged the Federal Government and the Central Bank of Nigeria (CBN) to take decisive measures to strengthen the naira to between N900 and N1,000 to the United States dollar, arguing that a stronger currency would translate into lower food and commodity prices and provide relief for Nigerian workers.
TUC President-General, Comrade Festus Osifo, made the call in Abuja on Tuesday while addressing journalists on the state of the Nigerian economy, insecurity, food prices and other issues affecting workers and the wider population.
Osifo said although the naira had appreciated from about N1,800 to the dollar in early 2024 to around N1,380 currently, the currency remained undervalued and the gains had yet to translate into sufficient relief for Nigerians at the microeconomic level.
“Today, it has stabilised around 1,380 naira to a dollar. But the Trade Union Congress of Nigeria still feels that this is still relatively high. We still believe that our naira is still undervalued,” he said.
According to him, the fair value of the naira, based on purchasing power parity and assessments by economic institutions, could be around N900 to N1,000 to the dollar.
“We strongly believe that the fair value of our naira, as explained by all agencies, as explained by all economic think tanks, including the World Bank and IMF, including the government of CBN, we know that the fair value of our naira using purchasing power parity could be somewhere around 900 naira, maximum N1,000 to a dollar,” Osifo said.
The TUC leader said the relative stabilisation of some major macroeconomic indicators had not translated into adequate relief for ordinary Nigerians, stressing that workers, traders and households were more concerned about the prices of goods and services they encounter daily.
“The macroeconomy is known to the economists. It is known to the bourgeois. But for the talakawas, for the workers, for the traders, all they relate with are the issues that are bordering on the microeconomy,” he said.
Osifo argued that the continued weakness of the naira remained one of the factors preventing macroeconomic gains from translating into lower market prices.
He said virtually every aspect of production and consumption had a dollar component, particularly imported goods, fertiliser and other agricultural inputs, meaning that exchange-rate depreciation ultimately feeds into the prices paid by consumers.
“The value of everything reflects devaluation, most especially if they are imported goods,” he said.
According to him, strengthening the naira to around N1,000 to the dollar would have a direct impact on inflation and the prices of goods and services.
“If that is done, it is going to reflect in the inflation figures, it’s going to reflect in the cost of goods in the market,” Osifo said.
He also criticised the failure of wage adjustments to adequately reflect the impact of the naira’s depreciation, arguing that Nigerian workers had effectively borne much of the burden of the currency crisis.
Osifo said while the new minimum wage represented a significant nominal increase, consequential adjustments across government institutions had been inadequate.
“One of those things that never reflects devaluation is the earnings of the Nigerian workers,” he said.
He added that although the minimum wage negotiated represented about a 133 per cent increase, “the consequential adjustment that was done by almost all tiers of government was really abysmal.”
The TUC president said the imbalance meant that while the cost of imported goods and other commodities adjusted in line with the exchange rate, workers’ incomes did not receive a corresponding increase.
He illustrated the situation with the cost of imported goods, saying a product worth $100 would become more expensive in naira terms whenever the currency depreciated.
“The only people that doesn’t reflect that is the workers, because they did not actually implement the consequential adjustment the way it should be done,” he said.
Osifo also linked the exchange-rate situation to the rising cost of food, arguing that government must pursue policies that expand domestic food supply while maintaining food imports until insecurity is sufficiently addressed.
He warned against prematurely stopping food imports, saying doing so without first enabling farmers to return safely to their farms could trigger another increase in food prices.
“We don’t want bag of rice to go back again to 100,000 Naira. We don’t want bag of rice to go back again to 120,000 Naira. Even where it is today, we still believe it’s still relatively high,” he said.
The TUC leader said the government should sustain its food-importation policy until domestic production was capable of meeting national demand.
