The Nigerian government has candidly acknowledged its failure to address the foreign exchange crisis effectively. In a conversation with journalists in Lagos, Atiku Bagudu, the Minister of Budget and Economic Planning, expressed this transparency over the weekend. He pointed out that President Bola Ahmed Tinubu and the Central Bank of Nigeria (CBN) have devised policy reforms to ameliorate the exchange rate.
Bagudu emphasized that liberalizing the foreign exchange market, akin to other countries, has paved the way for improved exchange rates. He exuded confidence in Nigeria’s potential for a more robust performance in the foreign exchange market. Global indicators also suggest an impending improvement, thereby urging both local and foreign investors to take proactive measures. He emphasized the necessity of adopting a willing-buyer, willing-seller market approach rather than the facade of currency availability.
Reflecting on the recent Executive Orders signed by President Buhari, Bagudu highlighted the country’s prevailing self-deception concerning the scarcity of foreign currency. He likened the situation to a hypothetical legislation dictating inflated prices for yams, causing hoarding and eventual price hikes. While acknowledging the inconvenience brought about by the current market fluctuations, Bagudu remains optimistic, believing that the measures taken by the President and the central bank will ultimately yield stability and improvement. He underscored that countries that have traversed a similar path experienced long-term enhancement on average.
The forex market crisis escalated when the Central Bank of Nigeria floated the Naira on June 14, 2023, leading to unprecedented fluctuations. As of Friday, the Naira was quoted at N890.54 per dollar at the official foreign exchange, a stark contrast from N460.702 per dollar in May 2023.
