In a significant turn of events, the Naira has maintained an upswing against the United States Dollar as it closed at N1,382/$ on the official NAFEM window, as against the N1,598/$1 it was at the beginning of the week.

The parallel market also saw positive movement, with the Naira closing at N1,470/$1 yesterday, up from the N1,600/$1 it was on Monday.

Basking in the euphoria of the naira appreciation against the greenback, President Bola Tinubu, yesterday, appealed to Nigerians to patronise indigenous goods and services to sustain the emerging positive showing of the Naira at the foreign exchange market.

The exchange rate of the Naira to other international currencies had steadily slided into a weak position since government introduced a policy to float the currency last year, in an attempt to curb currency arbitrage.

However, the President noted that the positive development around Naira’s exchange value doesn’t call for clinking of glasses yet, saying there was need for more work and efforts to sustain the gains.

He advised patriotic Nigerians to blow the whistle and expose those engaging in currency sharp practices.

Presidential spokesperson, Ajuri Ngelale, who handed down the President’s advice to Nigerians while speaking to newsmen at the State House, Abuja, also explained that part of the reason for the administration to achieve a strong Naira is to achieve ease for the working Nigerian, especially when the new minimum wage comes to effect.

He said:

I’m certain that everyone seated here and indeed Nigerians at large have witnessed the seismic shifts that have taken place within the nation’s foreign exchange market over the course of the last several days and the strengthening of the Nigerian Naira against the United States Dollar.

This is clearly the direction all of us have wanted to head and we are very sober to the fact that this is no time to rest or to clap, this is a time to deepen our efforts to dig in and to work harder, which is why His Excellency President Bola Ahmed Tinubu, has approved a series of interventions to ensure that we see a mass strengthening of the Nigerian Naira against all other global currencies.

One, President Bola Tinubu, wants to communicate very clearly to our people that there has never been a more important time in our history to actively agree together that we will patronise and purchase made in Nigeria products across all value chains, across all sectors.

There is an intentionality that we must have on this issue that we want a strong currency, we want the spending power of our people to go up. We want every Naira and kobo we earn to be more valuable, not just here, but when we travel abroad, the way to achieve that is by doing just this.

In addition to that, His Excellency Mr. President, beyond the appeal to Nigerians to actively and intentionally make that decision every day to patronise made-in-Nigeria products and services, across the board, he is also wanting to ensure that Nigerians fully understand that the momentum that we are now seeing, with respect to the strengthening of our currency, is not going to slow down.

The efforts that Mr. President has put in place, in collaboration with other agencies of government, as well as the Central Bank of Nigeria, in dealing decisively with sharp practices on certain crypto-currency trading platforms, dealing decisively with sharp practices within the parallel market of the foreign exchange ecosystem, that these things are now yielding fruit.

What we now will need to see is an active effort on the part of our people to blow the whistle wherever they see any of these sharp practices taking place, to communicate with the agencies that deal with these issues directly and understanding that this is not a government versus malign actors issue. This is a Federal Republic of Nigeria versus malign actors issue and the activities of these actors negatively impact everybody seated in this room and everybody watching this broadcast and all Nigerians, both at home and abroad.

So all of us have to take up the mantle and agree that we will collaborate together to deal with these issues.

He is also ensuring that we bring a sustainable strength to the currency so that when we talk about a new minimum wage, because many of our people have asked, you know government officials about when the new minimum wage is coming in, those negotiations are ongoing. But what we do not want is a situation in which the minimum wage continues to be what it has always been in the history of our country, which is a moving goalpost.

The Presidential spokesman added:

If we do not get a firm grip on the value of our currency and it continues to be a volatile, devaluing asset, then whatever we do with the national minimum wage is going to essentially become a moot point, nullity. And so we are focused on ensuring that yes, we arrive at a new minimum wage that states can afford, and that will deal with all of the needs of Nigerian families across the country.

But we also want to ensure that what we peg it at is something that is sustainable over a number of years based on the long term, you know, stability that we want to bring to the Nigerian Naira with the interventions we’re presently making.

Ngelale, also explained that the federal government expects to save N5 billion quarterly from the three-month ban on all foreign trips funded by public money for ministers, heads of government agencies, and other officials which takes effect from April 1, 2024.

Tinubu had in a major cost cutting move recently imposed a strict three-month ban on all foreign trips funded by public money for ministers, heads of government agencies, and other officials.

The travel ban is aimed at reducing the rising expenses incurred by ministries, departments, and agencies (MDAs) on international travel and ensuring that cabinet members and heads of MDAs focus on their respective mandates for effective service delivery.
Commenting on the issue, presidential spokesperson said:

So the President is doing everything he can to ensure that he steps in to ease the burden on families while also ensuring that he holds the public sector and the federal government of Nigeria accountable to prudent spending, ensuring that we cut down drastically on travel expenditures, ensuring that with the temporary ban that is being put in place from April 1 on all but unnecessary foreign travel, we’re expecting to save over N5 billion per quarter.

This is going to be one out of several initiatives the President is taking to ensure that we reduce waste in the public sector in such a way that we can actually steer these very needed recurrent resources into the hands of those who are doing important work on behalf of the Nigerian people.

For example, Nigerians are well aware that judicial officers in the country are going to finally have internationally competitive pay rates, salary skills, which is very important for us very strategic in the sense that we can dramatically reduce the impact that corruption has always played in the judiciary, which has an impact on not just the ability of Nigerians to you know, get effective justice in the country, but also to ensure that businesses who we are now asking around the world to invest in Nigeria have a judicial system that they can trust with respect to any litigation that could arise from business practice in the country.

The effects are huge and the President is taking a multi-sectoral and comprehensive approach to ensuring that we bring prudence to government expenditure at a time when we are restructuring the economy of the Federation in such a way that sectors that are employing our people that are empowering our people are those sectors that will be able to more easily access lending both commercially and from public sector sources.

To complement the recovery programme of the administration, Ngelale recalled the various measures introduced by the President to ease the pains of the current harsh economic realities, saying the programmes are about going live.

President Tinubu is going to ensure that our micro small and medium-scale enterprises in the country have what they need to get through this difficult period which is why he has approved the Presidential conditional grant scheme in which over one million Nigerian businesses will be empowered with conditional grants this is money they will not have to pay back of up to N50,000 per nano enterprise, with over 1 million Nano enterprises being selected and granted these funds within every local government area of the Federation.

In addition to this, the Media Adviser stated that over N150 billion was being disbursed from the Bank of Industry and Small and Medium Enterprise Development Agency while also approved is the single-digit interest rate loans of up to N2 million to hundreds of 1000s of small and medium scale enterprises across all local government areas of the Federation.

According to him:

The President is determined to ensure that we steer lending toward labour intensive and including the developing sectors of the economy, ensuring that sectors like agriculture and manufacturing get the bulk of lending moving forward and sectors like construction.

Ngelale added that Tinubu has prioritised intervention of the sum of N75 billion to 75 industries and manufacturing companies with staff strength of over 1000 workers to ensure necessary support is given to such firms thereby expanding their hiring strength.

His words:

We want to ensure that those industries and sectors that are massively employing our people are those industries that are prioritised concerning government intervention, which is why the President has approved over N75 billion to be dispersed to 75 large-scale manufacturers across all states of the Federation.

These are going to be manufacturers who employ over 1000 Nigerians in each of their facilities and industries. We are going to ensure that they have the support that they need at the large scale so that Nigerian families who rely on these large-scale businesses are protected.

We want to see our large-scale industries, not just refuse to fire people, but actively increase and expand their hiring at this difficult time.

Naira Gains Fuelled by Renewed Confidence, CBN’s Strategic Interventions, Analysts Say

Meanwhile, speaking with THISDAY, Special Adviser to the Senate Committee on Banking, Insurance, and Other Financial Institutions, Uche Uwaleke, hailed the developments as a positive shift in sentiment of restored confidence.

Uwaleke noted the naira’s gain was as a result of CBN’s actions, including the clearance of forex backlogs and the resumption of FX sales to qualified BDCs.

Furthermore, Uwaleke highlighted favorable oil prices and increased crude oil production as additional factors supporting the currency appreciation.

The resumption of FX sales to qualified BDCs has gone a long way in improving liquidity in the retail segment of the forex market which has also reduced speculative activity.

Crude oil production has increased from 1.5 million barrels per day to 1.65 million barrels per day, now approaching 1.7 million barrels per day, and oil price has also been favorable. So fortunately for Nigeria, oil prices have also been on the rise,

he added.

For his part, the Head, of Financial Institutions Ratings at Agusto & Co, Mr. Ayokunle Olubunmi said:

The gain is from a multitude of factors. If we check against all currencies, it seems as if the dollar seems to be losing. So you see that even when comparing to the Dollar to Euro or pounds, the dollar is losing.

Also, as CBN raises rates, some funds that ordinarily would have gone to the black market or speculators are now attracted to high-interest rates. So those funds ae leaving the FX market and going into fixed-income securities.

The CBN has also been able to get more dollar funds if you recall the last two OMOs they did, they got a lot subscription from foreign investors which has helped.

Also, the CBN claiming to settle backlog of matured FX signifies to the market that they have dollars.

He, however, noted that because a significant inflow of FX was from foreign portfolio investors (FPIs), the sustainability of the trend needs to be monitored.

Justin Nwosu

Justin Nwosu is the founder and publisher of Flavision. His core interest is in writing unbiased news about Nigeria in particular and Africa in general. He’s a strong adherent of investigative journalism, with a bent on exposing corruption, abuse of power and societal ills.