The value of the Nigerian Naira has been consistently falling against major international currencies in recent times, particularly the US dollar. According to XE Currency Converter, as of November 12, 2023, it takes 802.896 Nigerian Naira to equal 1 US dollar. This decline in Naira value has resulted in higher import prices, inflation, and other economic challenges for the country.
Anyone who has a connection to the naira through citizenship or foreign business investment has been concerned about this. In spite of government efforts through the central bank, the CBN, the naira’s declining trend has managed to continue. Many attempts have been made over the years to stabilize or save the naira, but none of these measures have been successful in yielding the intended outcome. Nonetheless, a number of experts have put forth theories, created roadmaps, and shared their opinions on how the naira can be saved because this is a problem that impacts the public as well as the government.
Against this backdrop, here are five experts’ views on methods that can be adopted with the objective of saving the naira.
Mr Femi Onakanren, an Economic and Policy and Technology Solutions Specialist said that the rate or the status of the naira to the dollar is not the problem. “Equating the naira to the dollar is not the solution to the falling naira”, he said in a recent interview. He believes the main problems are a series of issues that have contributed to bringing the economy to its current standpoint.
Read Also : Israel-Hamas Conflict Could Lead to Soaring Fuel Prices, Warns World Bank
Mr. Onakanren mentioned the outstanding payments of forward contracts cause a disparity in forex which becomes the responsibility of the government to pay up. Another issue that contributes to the downward trend of the economy is budget deficit accumulation which pushes the government to either borrow more money or print more cash which either increases the debt servicing and creates depreciation by increasing demand for foreign currency against the naira or causing devaluation because there will be too much cash in circulation due to printing of more naira notes.
The expert economist has suggested that the solution will be to increase exports to increase foreign exchange and increase confidence in the market by paying off debt and reducing the demand for the dollar in the market.
Economics expert, Professor Leo Ukpong, stated the devaluation of the naira is owed to the security challenge in the country as it drives away foreign investors. He said the issues facing the naira may be multifaceted, it can however be narrowed down to a few things amongst which is the uncertainty caused by militants, bandits, and insurgents. He also pointed out that the low level of manufacturing in the country which makes the country largely dependent on importation contributes to the depreciation of the naira. He concluded that until these factors are addressed, the naira will continue to plummet.
Mr. Johnson Chukwu suggested that to prevent the depreciation of the naira, the government must create a balance between trade and import. He explained that the reason for the fall of the naira is due to the exit of foreign investors from the Nigerian market and the negative balance of trade which is a result of a higher import than export rate. The Economist advised that while Nigerians can try to protect their wealth by investing in other foreign currencies, the government should focus on improving our infrastructural supply to reduce the cost of doing business and production in the economy.
Dr. Emmanuel Ozigi opined that the exchange rate floating policy needs an urgent review as an unregulated exchange rate would cripple the economy. “You cannot have a free-for-all policy where there are no regulations because nobody thrives on a free-market policy where everybody determines, or the market forces determine. He has also called for the reduction of the dominance of the dollar in the Nigerian economy.
Dr. Sam Nzekwe, a financial expert has recommended that the government strengthen Nigeria’s industrialization policies, diversify the country’s export base, and concentrate on measures that will increase the amount of dollars available for purchase. This is because many items for which dollar allocation has been outlawed are still being imported.
