BUSINESS: We’ve been deceiving ourselves – Nigerian govt speaks on forex crisis

 

By Abdul Yakubu

The Federal Government has admitted not taking the right decision in tackling the foreign exchange crisis.

The Minister of Budget and Economic Planning, Atiku Bagudu, disclosed this in a chat with journalists in Lagos over the weekend.

According to him, President Bola Ahmed Tinubu and the Central Bank of Nigeria, CBN, policy reforms will improve the exchange rate.

He noted that countries that have liberalised their foreign exchange market, like Nigeria, have enjoyed better exchange rates, expressing confidence that Nigeria’s foreign exchange market will perform better.

Bagudu said global indices had shown that things would improve, advising local and foreign investors to take steps in this direction.

He said, “Mr. President has signed two Executive Orders. We have been deceiving ourselves; we have run a system where we no longer have dollars or foreign exchange. So even if you desire to enjoy repatriation, you don’t have to because you have boxed yourself into a corner. It has to be a willing-buyer, willing-seller market.

There are things you can’t control. If somebody makes legislation and says that every bag of yams will cost N100, the people who hold the yams will just take them quickly back to the store and lock them. So, the steps taken by Mr President and the central bank may be inconvenient now in terms of the fluctuation, but we believe it will stabilise and get better. Countries that have chosen that route have improved on average in the long run”, he said.

Recall that on June 14 2023, the Central Bank of Nigeria floated the Naira. Since then, the country’s forex exchange market has been fluctuating.

As of Friday, Naira was quoted at N890.54 per dollar at the official foreign exchange from N460.702 per dollar in May 2023.