Nigerians Have Lost Confidence In Naira–NESG

The Nigerian Economic Summit Group has said that Nigerians and investors have lost their confidence in the naira as a store of value.

Laoye Jaiyeola the Chief Executive Officer of the NESG said this in his presentation at the launch of the NESG 2022 Macroeconomic Outlook, monitored by THE WHISTLER.

The theme of the launch was “The Last Mile: Reforms Towards Significant Improvements in National Economic Outcomes.”

Jaiyeola in his presentation explained that the non-competitiveness of the naira explains why Nigerians are rushing to change their money into the United States dollar.

There is pressure on the Central Bank of Nigeria to devalue the naira which was adjusted to N411 against the dollar last year.

It has devalued further to N415.64 as of Tuesday and trades around N570 at the unofficial market.

Some experts are projecting that the currency will fall to around N500 at the official market by the end of the year.

He said, “It doesn’t matter how much steps we take. It doesn’t matter how much effort we put in. If we do not resolve the issue of the challenge around our FX, we may not be able to deliver the last mile effect.

“The demand for FX is significantly more than the supply for FX. There are two areas that we need to improve on our FX battling. How do we boost the availability of foreign exchange in Nigeria and the second thing is that how do we ensure that we have appropriate pricing for our FX in Nigeria?

“If you don’t have enough, you can choose a price. In this last mile, the effort of government should be geared towards how do we boost it.”

The NESG CEO lamented that many Nigerians and investors no longer trust the safety of their investments in naira due to its instability.

Jaiyeola explained, “Why should you tell anybody in Nigeria to store his money in Naira when your interest rate on naira in some cases is lower than the interest rates in other economies?

“If you put your money in treasury bills now, in a one year treasury bill, I’m not sure you are going to get up to five per cent per annum.

“Inflation is 15.63 per cent. Effectively, from the day you save your money, you have lost your money. That explains why people will always go and buy money and keep it in dollar, because naira is significantly becoming something that is not a store of value.”