With the heavy pressure on the Naira, the road to stabilising the currency will definitely be a long bumpy one for all, especially those in the business sector.
Nigeria needs to improve investors confidence which could boost her Foreign Direct Investment (FDI), foreign portfolio investments and other remittances.
As the situation gets tougher, the Centre for the Promotion of Private Enterprise (CPPE), is asking the Central Bank of Nigeria (CBN) to exercise better oversight on forex demands.
They believe this oversight will help ensure protection of the market from speculative assault and illicit capital outflows.
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Muda Yusuf, the executive director of CPPE explained that the accumulated backlog of unmet foreign exchange demand in the last few years has run into billions of dollars as a result of scarcity of forex.
It is the pressure of the backlog of unmet demands and other maturing forex related obligations that has been unleashed on the investors and exporters window.
According to Yusuf, the level of CBN intervention in the forex market has drastically reduced when compared to first five months of the year.
“Reports obtained from the CBN show a total of $17 billion intervention by the CBN in the forex market in 2022. This an average of N1.4 billion per month.
“But since the inception of this administration, we have not seen an intervention of up to $1 billion in total. It expected that as the scale of intervention improves, the volatility will be subdued.”
These notwithstanding, the CPPE, according to Muda Yusuf, believes that the Federal government is on the right path.
“Tinubu administration is on the right path and that the current volatility in the foreign exchange market are challenges typically inherent in a major policy transition.
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“In a couple of months, we expect the instability to subside.
“On the supply of forex side, the trajectory is that there would be an improvement in oil output which would boost forex earnings.
“The prospects of improved domestic refining of petroleum products in the coming months will reduce forex demand pressure from importation of petroleum products,” he said, expressing optimism.
In the video below, we highlight all of the effects of the unification of dollar rates in Nigeria.
