The Nigerian economy is facing dollar shortages as oil revenue declines due to weaker prices and a drop in production to the lowest in more than 20 years. In light of this, the vice president of the Federal Republic of Nigeria is advocating for a review of our foreign exchange rate.
“Nigeria needs a ‘substantial review’ of its foreign exchange policies, including further consideration about devaluing the naira,” says Vice President Yemi Osinbajo.
President Muhammadu Buhari has resisted calls from investors and the International Monetary Fund to devalue the naira, which at the official rate has been pegged at 197-199 per dollar since March 2015. The black market exchange rate, which most businesses have been forced to use, is roughly 320 per dollar.
Nevertheless, Osinbajo’s statement marks a shift in position by a government that has remained uncompromising on its managed foreign exchange policy.
“There has to be a substantial re-evaluation of the foreign exchange policy especially with the view to increasing FX supply and capital importation,” he said, adding that he’s “confident” that measures can be put in place to “attract FX.”
Finally, he states that, “the government is in talks about managing foreign exchange supplies with the central bank, which is entirely responsible for monetary policy; ‘Devaluation may feature’ in the discussions with the bank, he said.