FG Hints at New Strategy to Stabilise Naira, Address Forex Supply
- The DG of the Budget Office of the Federation has stated that naira's stability hinges on foreign Loans and investments
- Prof Ben Akabueze emphasized the need for investment and enhanced trade as crucial support for the country
- He highlighted that these measures will address the foreign currency supply situation that puts pressure on the exchange rate
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
Ben Akabueze, the director general of the Budget Office of the Federation, emphasized Nigeria's urgent requirement for concessional foreign currency loans and investments to enhance the stability of the country's exchange rate.
He made these remarks on behalf of the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during the G24 press briefing at the ongoing International Monetary Fund/World Bank spring meetings in Washington DC, the United States.
Source: UGC
FG considers foreign loans, investments
It would be recalled that until the recent recovery, the naira depreciated in value throughout the latter part of 2023 and early 2024, falling to an all-time high of N1,900 to a dollar.
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When discussing Nigeria's fiscal challenges, Akabueze emphasized the need for investment and enhanced trade as crucial support for the country.
According to Leadership, he acknowledged the assistance of Official Development Assistance (ODA) but stressed that it alone cannot sustainably address Nigeria's extensive problems.
He said:
“There are a lot of investment opportunities especially in areas like infrastructure. At the same time, of course, concessionary debt and support still remain important for the country, especially foreign currency-denominated for one it helps also with addressing the foreign currency supply situation that puts pressure on the exchange rate."
He highlighted that the high inflation in the country is being tackled, hence an expectation of a reversing trend towards the second half of the year
He added:
"The exchange rates are stabilised now, we have seen basically the parallel and the foreign exchange market rates merge."
Akabueze highlighted that these measures will boost confidence among investors, including portfolio investors, foreign direct investors, and domestic investors
Also speaking recently, Vice President Kashim Shettima commended President Bola Tinubu's leadership in managing Nigeria's currency while expressing optimism that the naira will continue to appreciate against the dollar at the forex market.
Also, speaking on the matter, Tobi Johnson, an economist, told Legit.ng that stabilizing the naira requires a multi-faceted approach.
He said:
"Firstly, fiscal discipline is crucial to curb excessive government spending and inflation.
"Implementing monetary policies that control money supply and interest rates can help manage inflation.
"Encouraging foreign investment through favorable policies and promoting exports can boost foreign exchange reserves.
"Lastly, fostering investor confidence through transparent governance and consistent economic reforms is vital for long-term stability."
He added that, overall, a comprehensive strategy addressing fiscal, monetary, and structural issues is necessary to stabilize the naira.
Naira world's top-performing currency in April
In related news, Legit.ng reported that Goldman Sachs has hinted at the possibility of the naira surpassing this projection and trading even lower against the dollar.
Economists at the company said the naira had already established itself as the top-performing currency globally in April.
They added that the local currency was expected to extend its gains amid the continuing effective policy management by the CBN.
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Source: Legit.ng
