Financial analysts have expressed optimism that the naira will regain its real value before the end of 2024, if the government put an end to oil theft and increase non oil export.
In a chat with The Guardian, the Managing Director of Afrinvest Securities Limited, Ayodeji Ebo, advised the government to raise foreign exchange from the international market to stabilise the currency.
According to him, government should stop oil theft and increase the barrel of crude oil produced daily.
“Also, we need to access the international market for loan. For instance, in 2021, the government raised about $5.2b and we need that type of intervention again. We need to stop oil theft to increase supply. If these two are done, the naira will be strengthened in the short term while in the long term, we need to focus on non oil export.
A stockbroker, Charles Fakrogha, said the naira will appreciate and stabilise against foreign currencies, especially United States dollar, as soon as the government stop oil theft and shift to non oil export.
Fakrogha said unifying the exchange rate received enormous support but for the economy to reap the benefits, Nigerians must change consumption pattern from over reliance on foreign products to locally produced goods.
“The issue is that the naira is having free fall because there is so much demand for the dollar. The government cannot meet the supply, it is simple economics. For me, whenever the CBN is doing will make impact if the policies put in place are implemented in term of increasing dollar receipt, revenue and to export more.
“Yes, we must be a productive economy, we must produce and export, that is the only way to grow an economy. We cannot have an economy when we continue to import,” Fakrogha, the Chief Relationship Officer at Foresight Securities & Investment Limited · stated.
According to the financial expert, with increase revenue from oil and non oil export, CBN will be able to meet demand for foreign exchange.
“More people want the dollar and we don’t have the supply and where is the supply coming from? Our receipt of dollar, our revenue and our main source is oil and gas.
“We are seeing what’s happening in the sector currently- oil theft and leakages- we are not getting what we are expected to get from the oil sector.
There is a lot of pressure and the CBN will say they want to support the naira from our reserves and we can’t continue defending our national currency from your reserves, for how long? So, the naira will continue to have a free fall.
“The government did unification of the exchange rate which is a good policy and we supported it and before you do that, there must be measures on ground to support the dollar.
“CBN is supposed to be a market maker so that when more people are buying, the CBN is selling and when more people are selling, the CBN is buying but the CBN itself doesn’t have the dollar to supply that’s why we are seeing the naira depreciating,” he stated.
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