Ex-Minister, Olusegun Aganga Explains Solution to Weak Nigerian Currency as Naira Fall Continues

• The naira lost 3.78 per cent throughout the week's five trading days compared to a dollar
• The naira hit the lowest in the unofficial market on Thursday to record N1,175 per dollar
• According to data, the FX market turnover climbed throughout the trading days

The dollar started the week at N1,149 on Monday and ended the week at N1,170 on Friday. This means the naira dropped by 1.82% on the parallel market, also known as the black market.

During the week, however, the naira hit a new low at the unofficial market on Thursday, October 19, 2023. Currency traders told Legit.ng that the naira plunged to N1,175 per dollar on Thursday in the black market.

Despite improved dollar liquidity of 83.94% on the official market, the naira lost 3.78% throughout the week's five trading days.

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Naira ends week against dollar with loss, black market traders quote new rates

In the foreign exchange (FX) market, one dollar was quoted at N778.80 on Monday, October 16, 2023, and N808.27 on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

The FX market turnover climbed throughout the trading days under review, rising by 83.94 per cent to $79.26 million on Friday, the last trading day, from $43.09 million recorded on Monday, October 16, 2023, according to data from the FMDQ.

The naira continues to decline

The rapid decline in the value of the naira last week was caused, according to BusinessDay, by a mix of demands from 43 items restored to access foreign cash and demands for school payments, among others.

According to a Vanguard report, Olusegun Aganga, a former minister of finance, explained that the naira would continue to depreciate if Nigeria continued to be an import-dependent nation.

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“No supply of dollar”: Naira sets new record, crashes to lowest at unofficial market

He said that spending billions to defend the naira was not a good move without making the necessary investments in the manufacturing sector to support the nation's exports.

According to him, Nigeria must produce for both domestic consumption and, more significantly, export for the naira to be robust.

Aganga said:

“What is the wisdom in spending billions defending the naira when it continues to fall instead of investing in genuine manufacturers and exporters of high-value products that would earn Nigeria foreign income and more.”

“Unlike the trillions spent on subsidies, bailouts, the Agric Anchor Borrowers Programme, the refineries, I can assure you that every naira no matter how large, that is well spent on the strategic industrial sectors can be easily recovered and will deliver tremendous benefits to the economy and the nation.”

Legit.ng had reported that Bureaux de Change operators had asked the CBN to involve them in its plans to strengthen the naira.

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“No More N1,000/$”: BDCs send message to CBN as naira hits N1,175 per dollar

ABCON Ask CBN to Allow Them Crash Dollar Via PoS, Online Operations, Others

Legit.ng reported that currency dealers under the aegis of the Association of Bureau de Change of Operators of Nigeria (ABCON) have asked the Central Bank of Nigeria (CBN) to let Bureau de Change operators carry out online dollar transactions and Point of Sale (PoS) agency to boost forex liquidity.

The association asked the apex bank to grant them the regulatory approvals to let BDCs access diaspora remittances via International Money Transfer Operators (IMTOs) proceeds.

Aminu Gwadabe, ABCON President, revealed this in a statement where he said that the participation of currency dealers in the retail segment of the Forex market would aid in achieving a stable, solid, and virile exchange rate.

Source: Legit.ng