President Bola Tinubu has given assurance to Nigerians and investors regarding a plan to enhance the country’s foreign exchange liquidity. Speaking at the 29th Nigerian Economic Summit in Abuja, President Tinubu acknowledged the challenges faced by businesses in the financial markets and pledged additional foreign exchange liquidity to restore market confidence.
He also emphasized his administration’s commitment to strengthening governance and laid out his administration’s eight key priorities, including poverty reduction, food security, economic growth, and anti-corruption measures.
Economic Initiatives and Expectations
President Tinubu mentioned various measures introduced by his government to stimulate economic recovery, including a $5 billion intervention to support small businesses and agriculture, along with upcoming initiatives such as a student loan program and consumer credit schemes.
He urged the private sector to collaborate in building a better Nigeria and emphasized the importance of government-private sector partnerships.
FX Backlog and Government’s Commitment
In addressing the foreign exchange backlog, President Tinubu stated, “All foreign exchange future contracts will be honored by this government.” He assured that his administration has a clear plan to acquire the necessary foreign exchange to revitalize the economy.
The Minister of Finance, Wale Edun, explained that the country expects about $10 billion in foreign exchange inflows in the near term to address the foreign exchange backlog and stabilize the national currency.
He also highlighted two executive orders signed by the President to address the liquidity issue in the forex market.
Forex Market Reforms and Central Bank’s Commitment
The Federal Government plans to automate transactions in the entire foreign exchange market to prevent arbitrage and tackle naira speculators. The Governor of the Central Bank of Nigeria, Yemi Cardoso, reiterated the commitment to achieving price stability and creating a more predictable and transparent forex market. He mentioned the ongoing efforts to unify the foreign exchange market.
Broadening the Currency Market and Naira’s Status
The government plans to include additional legitimate participants in the official currency market, such as bureaux de change and fintech companies. However, the naira continues to face challenges, and its value depreciated further in both the parallel and official markets.
Expert Opinions and Call for Action
Economists have raised concerns about the depreciation of the naira, emphasizing the need for a balanced trade and payment system, decisive actions on payments made in dollars, and measures to prevent dollar hoarding.
They stressed the importance of addressing insufficient dollar supply, oil leakages, and enhancing production, while also urging the government to engage with stakeholders and take immediate actions to curb speculation and stabilize the currency.
This news report highlights President Tinubu’s commitment to strengthening the Nigerian economy and addressing foreign exchange challenges, while also shedding light on expert opinions and the need for swift actions to stabilize the national currency.