CEM REPORT, FINANCE | The President Bola Ahmed Tinubu led administration has continued to seek ways to resolve the various economic challenges plaguing the nation via several policies. The administration in its latest move to stabilise and grow the economy is seeking to find a lasting solution to the foreign exchange (FX) crisis forging over the nation.
The move according to the Minister of Finance, Wale Edun, is to seek FX funding from the World Bank. The minister believes that addressing the tight liquidity status of the nation’s FX market will ease the economic challenge confronting the nation.
Whilst this move appears to only increase the nation’s public debt profile, Mr Edun elaborated that the administration intends to seek zero-interest funding.
“We were meeting with the World Bank. As we know, this is a time of very tight foreign exchange liquidity. So, it must be sought and found wherever.
“And one of those cheap and viable ways is foreign exchange funding, which virtually comes free. A lot of it has zero interest from the World Bank, a multilateral development institution set up to help developing countries such as ours.”
Furthermore, he hinted that work was in progress to expand the nation’s development plan with input from key stakeholders including the private sector. He added that the administration will continue to strategically heal the economy of the nation.
“And so we went through things like the economic management framework, which would include a lot of consultations, step-by-step with other stakeholders, including the private sector that will serve as one of the key ad hoc committees that we put together and the updated and expanded national development plan.
“You all know the measures that Mr. President has taken. We have briefly dealt with the issue of subsidy that was draining government revenues. He has briefly dealt with the foreign exchange situation and multiple windows, which was deterring investors. But as we know, there is much to be done.”
The Nigeria FX market has maintained a steady decline creating a harsh business environment. The scarcity of FX attributed to the unification of the exchange windows has had the dollar exchanging at ₦1,000 to $1. The decline had also been attributed to overdue backlog payments of $6.8 billion, resulting in a shortage in the supply of dollars at the CBN.
This present administration has continued to reiterate that continue to seek measure to stabilise and strengthen the national currency – naira. It had hence appointed a new administration at the Central Bank of Nigeria.
The President has also in recent times called on international corporations to invest in the Nigerian economy assuring a favourable business environment and appropriate returns.