Billionaire Tony Elumelu Gives Hope on Naira Rebound, Suggests Solutions to Falling Currency

• Nigerian investor Tony Elumelu has weighed in on Nigeria's economy, speaking on the recent action of the CBN
• He said he would take the same decision as the CBN governor Cardoso if he were in his position
• He expressed optimism that Nigeria under the current administration is on the right track economically

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Tony Elumelu, a Nigerian business tycoon and chairman of the United Bank for Africa (UBA) and Heirs Holdings, has said that if he were in charge of the country's central bank, he would make the same decision that the CBN governor made at its most recent Monetary Policy Committee (MPC) meeting.

This occurred after the Monetary Policy Rate (MPR) was increased by 400 basis points to 22.75% from 18.75% as a component of its monetary policy tightening during the meeting led by Olayemi Cardoso.

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With the country's inflation rate at 29.90%, Cardoso stated that the new MPR was a component of efforts to combat inflation.

He also mentioned that the Cash Reserve Ratio (CRR) increased to 45% and that the Liquidity Ratio had remained at 30%.

Elumelu expresses optimism

In an interview with Bloomberg Television, Elumelu maintained that Nigeria's economy was headed in the right direction even though the Bola Tinubu administration was still in its early stages.

He stated that the authorities must be consistent and concentrated in their approach to guarantee that the recent policies produce the desired outcomes in the medium to long term.

He expressed optimism that Nigeria is progressing, pointing out that transformation takes time and that now is the perfect moment to continue with the present reforms.

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He said:

“Of all the decisions the central bank took at the last MPC, if I were there, those are the exact decisions I would take in this circumstance. Hopefully, let us continue and not relent. It’s still early days. This is just the starting, but it seems one can be fairly and cautiously optimistic that we’re getting there. We are on the right track.”

Elumelu on naira

When asked when he thought the naira would begin to appreciate significantly compared to the US dollar, the philanthropist replied, "it takes God to say that, to answer that."

As a transformational person, he said the transformation journey takes time and comes with a few initial pains. He added that the key to winning is staying focused, consistent, and committed.

He said:

“What I see, you know, I mean fixing the issues, making sure that interest rate is not negative to the investor, making sure that … it’s an inflationary situation and that we’re contracting as much as possible, so that we have fewer Naira chasing dollars, giving confidence to the market.”

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CBN to clear the backlog

He said that to foster confidence, the CBN needs to keep cutting down on the backlog of foreign exchange forwards.

He said:

“(They need to say) We know we have forwards,so don’t worry about these forwards. We will reduce themt and continue to do more. Ibelieve that it will ultimately narrow or come downl. When? I don’t know."

The billionaire stated that what he observes gives him hope both as an investor and an economist. He said this will become the norm in the medium to long run.

He said:

“It has started, but I think it will take a bit of time. Medium to long term, I think we will get it right, but the key thing is to get the fundamentals right and not get too populist.”

Meanwhile, financial analysts opined that the recent CBN action point towards the fact that the bank is further experimenting with various models to ensure fx stability and appreciation in the naira value until it gets it right.

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Charles Abuede said,

"In my view, I think the CBN is already on the move to attain positive application of policy tools to ensure naira stability and further encourage other forms of price discovery in the near term. However, the jury is out there to see if the policy direction of the apex bank is effectively applied for the naira defence."

Tony Elumelu's wife buys more UBA shares

Legit.ng reported that the family members of Tony Elumelu, the board chairman of the United Bank for Africa, have decided to purchase additional shares in the bank.

This was disclosed in the bank's corporate filings, obtained by Legit.ng from Nigerian Exchange Limited.

Details show that Awele Elumelu, Ugochukwu Elumelu, and Nneka Elumelu all purchased new shares.

Source: Legit.ng