Experts Predict Naira Recovery in 2024, Ask FG to End Oil Theft, Boost Non-Oil Export
- The Managing Director of Afrivest Securities Limited, Ayodeji Egbo, has said that the naira will regain its total value
- He said the federal government should put measures in place to end oil theft and boost non-oil export
- The financial experts asked the Nigerian government to increase oil production to 1.8 million barrels daily
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Financial analysts have expressed optimism that the naira will regain its real value before the end of 2024 if the government ends oil theft and increases non-oil exports out of the country.
However, the Managing Director of Afrinvest Securities Limited, Ayodeji Ebo, advised the government to raise foreign exchange from the international market to stabilize the currency.
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FG should end oil theft and boost non-oil export
According to him, the government should end oil theft and ensure an increase in the barrel of daily crude oil production.
He said:
"Naira will achieve its total value before year-end, but it depends on the move made or how policies are managed. The government should increase supply, and the naira will appreciate if that is properly managed.
"Also, we need to access the international loan market. For instance, in 2021, the government raised about $5.2 billion; we need that type of intervention again. We need to stop oil theft to increase supply. If these two are done, the naira will be strengthened in the short term while in the long term, we need to focus on non-oil export."
Notably, the government should end oil theft and boost production to 1.8mbpd to increase foreign exchange supply while Nigeria accesses the international market to raise other structures.
He said that before the naira can stabilize, the country needs over $10bn in the economy, and as crude oil continues to provide the regular inflow, we need to work on long-term non-oil export.
A stock broker, Charles Fakrogha, said the naira will appreciate and stabilize against foreign currencies, especially the United States dollar, as soon as the government stops oil theft and shifts to non-oil exports.
Fakrogha said unifying the exchange rate by the current administration received enormous support. Still, for the economy to reap the benefits, Nigerians must change their consumption pattern from over-reliance on foreign products to locally produced goods.
CBN to meet FX needs via non-oil exports
"The issue is that the naira is having a free fall because there is so much demand for the dollar. The government cannot meet the supply; it's simple economics. For me, what the CBN is doing will make an impact if the policies they put in place are implemented to increase our dollar receipt and revenue, and we continue to export more when we receive this; we will see the value of the naira continue to stabilize.
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"Yes, we must be a productive economy; we must be able to produce and export. That's the only way to grow an economy. We cannot have an economy when we continue to import. The government has to change its attitude regarding Importation; we need to see how to increase our exports, ensure no leakages, and increase our revenue. If we do this, we will see an increase in the value of our national currency," Fakrogha, the Chief Relationship Officer at Foresight Securities & Investment Limited · stated.
According to the financial expert, CBN can meet the demand for foreign exchange with increased revenue from oil and non-oil exports.
"More people want the dollar, and we need the supply, and where is the supply coming from? Our receipt of dollars, our revenue, and our primary source is oil and gas.
"We are currently seeing what's happening in the sector- oil theft and leakages- we are not getting what we expect from there. Also, how many non-oil exports do we do? We are exporting less, and more Nigerians want to continue to import.
"They crave for foreign things and all that. There is a lot of pressure, and the CBN will say they want to support the naira from our reserves, and we can't continue defending our national currency from your reserves; for how long? So, the naira will continue to have a free fall.
"The government did unify the exchange rate, which is a good policy, and we supported it, and before you do that, there must be measures on the ground to help the dollar.
"CBN is supposed to be a market maker so that when more people are buying, the CBN is selling, and when more people are selling, the CBN is buying, but the CBN itself doesn't have the dollar to supply. That's why we are seeing the naira depreciating," he stated.
Naira falls to lowest 24 hours after EFCC, BDC officials meeting
Legit.ng reported that the Nigerian foreign exchange market saw a historic decline in the value of the naira, which reached an unrivaled intraday high of N1,399 per dollar at the official market on Thursday, January 25, 2024.
Data from FMDQ show a significant 6.15% drop compared to the N1,313 rate observed during the intraday trading a day earlier.
Also, the intraday low saw a significant 11.28% drop as the dollar was quoted at N789 on Thursday, January 25, 2023, in contrast to N700 on Wednesday, January 24, 2024.
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Source: Legit.ng
