CEM REPORT, FINANCE | The President Bola Ahmed Tinubu led federal government has expressed optimism that the Naira will soon begin to trade stronger against the Dollar.
According to the Special Adviser to the President on Monetary Policies, Wale Edun, the reforms introduced and implemented by the administration have begun to attract foreign investment.
He disclosed this during his screening for a ministerial appointment by the National Assembly.
He stated that the current exchange rate of the naira to the dollar is not backed by the fundamentals of the Nigerian economy but by speculation.
He stated that the current strength of the naira is as a result of unmet Dollar demand, adding that corruption in the country’s exchange-rate system led to the wide disparity, which he said was now addressed.
“The fundamental value of the Naira should be somewhere around N700/$1, not the N800/$1 being quoted. So, a note of caution to the speculators; there is a chance they will lose.
“What I can say is this, for a country that has revenue flows from oil, remittances, and other non-oil exports of over $100 billion yearly, there is no reason that there is not a stable exchange rate.
“All other things being equal, the current N860/$ we are seeing today is not backed up by fundamentals of the Nigerian economy.”
“As liquidity flows in, the rate will come down,” he added.
Edun explained that the proposed palliatives on fuel subsidy removal would only be made available to the most vulnerable Nigerians who would be identified with the assistance of telecommunication network providers, who promised to assist the government with digital biometric validation of the beneficiaries.
“The removal of subsidy and elimination of multiple exchange windows has put us in a strong position going forward.
“A digital identity for every Nigerian is what is needed and what is recommended for us. The condition attached to the $800 million world bank loan states so.”
Edun, who, by his background and questions from the Senators, could be Nigeria’s next finance minister, said he would replicate the Lagos experience of improved internally generated revenue (IGR) at the national level.
He urged for a separation between the office of the accountant-general of the federation and the accountant-general of the federal government saying that has been his position for a long time.