INFLATION: Nigerians Warned Against Liabilities In Hard Currencies

Due to the weakening of the Naira value against the world’s major currencies, Nigerians should not build up liabilities in hard currencies as the tendency is that more Naira will be required to repay the debt in the long run.

Founding Managing Director of Agusto & CO, Mr. Bode Agusto, who disclosed this at a Bancassurance webinar titled: “Managing risks that keep CEOs up at night, the Bancassurance Partnership” organised by Access Bank and Coronation Insurance, stated that the rate of inflation on the Naira is high. Agusto stated:

“The Naira is a weak currency because the rate of inflation is very high, therefore we should not be owing hard currencies, that is currencies that have a significantly lower rate of inflation like the dollars, euro, pounds, yen etc.

“The long term rate of inflation on the dollar is two percent while the long term rate of inflation on the Naira is 12 percent. It means that the dollar losses two percent of its purchasing power every year, while the Naira losses about 12 percent of its purchasing power every year.”

Also speaking, Group Managing Director/ Chief Executive Officer of Access Bank Plc, Mr. Herbert Wigwe, said that several insurance companies in the past have been sluggish or slow to meeting the various claims made by customers even when they meet most requirements, but added that Coronation Insurance will be different from the pack. He stated:

“We want our customers to have the best underwriting and claims experience and we believe that it is possible that with a Bancassurance partnership it will be achieved.

“Large banks across the globe have Bancassurance partners who extend their suits of financial services obtainable directly or indirectly through the banks.”