Financial and capital market experts in Nigeria have proposed several strategies for the government to attract more foreign exchange and strengthen the naira.
The experts gave their remarks during the 2024 edition of the Vanguard Economic Discourse held in Lagos.
Since late 2023, the Nigerian naira has experienced a significant decline, plummeting to a historic low of approximately N1900 to the dollar by February 2024.
However, on the first trading day of June, the naira showed strength against the US dollar in both official and unofficial foreign exchange markets.
According to new data from FMDQ Securities, the naira appreciated to N1,476.12 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, June 3.
Under Governor Yemi Cardoso’s leadership, the Central Bank of Nigeria has implemented several policies to stabilise the declining naira.
However, these measures have not been as successful in boosting the naira’s value as many Nigerians had hoped.
The fluctuating foreign exchange rate has significantly affected the prices of goods and services in Nigeria, raising widespread concerns.
Bismarck Rewane, MD/CEO of Financial Derivatives, emphasised that while reforms are essential for an efficient forex market, the country must also increase its dollar earnings to achieve any substantial appreciation of the naira.
He said:
According to Vanguard, Rewane noted that the central bank cannot print dollars, even if it wants to. Instead, it must focus on earning dollars and maintaining an efficient and transparent market.
He emphasised the need for improved communication between operators, policymakers, and regulators, as the CBN’s interventions to defend the naira are only temporary measures.
Dele Oye, the President of the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), urged the CBN to align with global practices in defending the naira.
Oye suggested prioritising bold, pro-business reforms that create a favourable investment climate, thereby boosting dollar inflows through increased foreign investment.
He said:
He emphasised that to secure sustainable foreign investment, both in the short and long term, the government needs to implement bold pro-business reforms to foster a conducive investment environment.
He added that these reforms should include improving trade infrastructure, reducing tariffs, liberalising key economic sectors, and streamlining regulatory processes.
In related news, TimesNow.com.ng earlier reported that the CBN had prohibited street trading of foreign currencies by BDC operators, emphasising the necessity for better regulation of the foreign exchange market.
Blaise Ijebor, CBN’s director of risk management, stated that the apex bank does not permit street trading of foreign currencies.
