The fall of the naira against the dollar will continue unabated if the Federal Government does not work on possible solutions to put an end to crude oil theft, increase local production, and the exportation of goods. The country must also boost oil production in the country. The Naira exchange rate is almost N600 to
The fall of the naira against the dollar will continue unabated if the Federal Government does not work on possible solutions to put an end to crude oil theft, increase local production, and the exportation of goods. The country must also boost oil production in the country.
The Naira exchange rate is almost N600 to a dollar.
According to the Chambers of Commerce, Industry, Mines, and Agriculture, if the Federal Government fails to do the needful, then the naira might cross the N600 to a dollar mark in the parallel market.
Business owners, manufacturers, as well as many other Nigerians, are not finding things easy as they expressed deep concern over the value of the naira which is now exchanged at the rate of N590 in the parallel market. Official rates were as high as N416.23, as reports show that the naira will soon fall to an unparalleled N600 a dollar.
Mr. Johnson Chukwu, the MD/CEO, Cowry Asset Management, noted that the naira has continued to suffer a free fall because of weak foreign exchange earnings, due partly to the low crude oil production, crude oil theft, and low export of goods.
He stated, “It’s all about how much you spend on importation compared to how much you earn from exportation. We are not producing enough, so we don’t have enough resources to support the naira.
The immediate solution is to stop crude oil theft so we can make more revenue, and the long-term solution would be to diversify our economy so that we can produce more exportable commodities or produce more of what we consume to limit our importation.” He added.
Dr. Muda Yusuf, the Chief Executive Officer, Centre for Promotion of Private Enterprise, stated that apart from the crude oil theft and low production, he said that the federal government should work on a more flexible exchange rate policy regime, in order to improve liquidity in the foreign exchange market, to reduce uncertainty in the forex market, and to improve investor’s confidence.
He further opines this will help as a more transparent mechanism for forex allocation, it would also minimize discretion in the allocation of forex and reduces the loophole for sharp practices.
In conclusion, low production and exportation of goods and also the continuous stealing of crude oil is the major issue the federal government should work on. In the long run, this will help reduce the high exchange rate of the naira to the dollar in the country.