Uduegbunam Chukwujama
The Nigerian government foresees naira recovery, saying it expects the national currency to recover in the next three years.
The naira has experienced unprecedented loss of value against the dollar and other foreign currencies in the last one year, a major weakness pundits blame on faulty fiscal and monetary policy implementation of the federal government.
Join our WhatsApp ChannelThe President Muhammadu Buhari-led government, which had projected that the United States currency, dollar, would exchange at a rate of N435.57 next year, expressed the hope that the currency would recover in 2025.
The country’s Ministry of Finance in its 2023 budget call hinted of naira recovery and expects that one dollar would trade for N435.57 in the next three years and that current pressure on the naira would drop.
There are strong indication that the Central Bank of Nigeria (CBN) will continue to devalue the Nigerian currency beyond 2022, even as pundits do not see much possibilities with the naira recovery forecasts under the current fiscal and monetary policy frameworks.
Long-run estimates in the 2023 budget circular call to heads of Ministries, Departments & Agencies (MDA’s) suggest that the naira will exchange one dollar at N435.57. It is also projected in the 2022 national budget that the naira will exchange $1 at least N410.15. The budget circular further hinted a N435.92 exchange rate in 2024.
Meanwhile, as the currency struggles, Bureau De Change operators agreed to assist the country’s central bank and its governor Godwin Emefiele in strengthening it against the dollar, although no concrete plans were made public.
The BDC operators had complained that the apex bank’s emergency policy in stopping sale of foreign currencies to them has badly affected the value of the Nigerian currency and the solution would be to resume sale of forex to Bureau De Change centers.
“It might sound counterintuitive, but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float,” BDC President, Aminu Gwadabe, had said in one of the reports published by Prime Business Africa .
”CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin; once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira.” Gwadabe said.
