Stakeholders Call for Increased Productivity and Reduced Importation as Naira Depreciates

The Nigerian Naira has once again begun to depreciate following a period of slight strengthening, prompting stakeholders to advocate for organic policies to bolster the currency’s value.

After President Bola Tinubu’s unification of dual exchange rates and the floatation of the currency in 2023, the Naira experienced significant fluctuations. The prevailing dollar illiquidity led to the Naira reaching as high as N1,900 against the dollar in February. However, there was a gradual appreciation in March, with the Naira peaking at N1,100 to the dollar in early April.

This appreciation was attributed to monetary policy tightening by the Central Bank of Nigeria (CBN) and efforts to enhance dollar liquidity by selling treasury bills to foreign portfolio investors. Despite these measures, the Naira has once again started to weaken, currently exchanging at N1,400 to the dollar.

Stakeholders, including Okechukwu Unegbu, a former president of the Chartered Institute of Bankers of Nigeria (CIBN), have expressed concerns about the sustainability of the measures taken by the CBN. Unegbu emphasized the need for improved productivity, increased consumption of locally manufactured goods and services, and a reduction in exportation to strengthen the Naira organically.

Renowned economist Prof. Ken Ife highlighted Nigeria’s import-dependent economy as a significant factor contributing to the Naira’s weakness. He stressed the importance of diversifying the country’s export base and adding value to exports to reduce vulnerability to external factors.

Dr. Chijioke Ekechukwu, another economist, emphasized the importance of exchange rate stability for economic planning and confidence building. He urged the federal government to ensure that crude oil sales meet OPEC quotas and that revenue from such sales is channeled through the CBN to provide liquidity and address economic challenges.

In response to concerns about speculation in the foreign exchange market, the Association of Bureau De Change Operators of Nigeria (ABCON) reaffirmed its commitment to defending the Naira. ABCON President Aminu Gwadabe called for greater regulatory oversight and collaboration with authorities to address illegal economic activities contributing to the Naira’s depreciation.

Meanwhile, the CBN announced the successful resolution of valid foreign exchange backlogs totaling seven billion dollars and approved the sale of additional foreign exchange to eligible Bureau De Change operators to meet market demands.