Financial analysts have expressed optimism that the naira will regain its real value before the end of the year, 2024 if the government put an end to oil theft as well as increase non oil export out of the country.
Speaking to our Correspondent, the Managing Director of Afrinvest Securities Limited, Ayodeji Ebo, however, advised the government to raise foreign exchange from the international market in other to stabilise the currency.
According to him, government should stop oil theft and ensure increase in the barrel of daily crude oil production.
“Naira will acheive its value before year end but it depends on the move that is made or how policies are managed. Government should increase supply and if that is properly managed, the naira will appreciate.
“Also, we need to access the international market for loan. For instance, in 2021, the government raised about $5.2 billion 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.”
Importantly, the government should stop oil theft and increase production to 1.8m barrel per day to increase FX supply while we access international market to raise other structures. Before naira can stabilize, the country needs over $10bn in the economy and as crude oil continue to provide the steady inflow, we need to work on long term non oil export,” he stated.
A stock broker, Charles Fakrogha, said the naira will appreciate and stabilize against foreign currencies, especially United States dollar, as soon as the government stop oil theft and shift to non oil export.
Speaking on phone to our Correspondent, Fakrogha, said unifying the exchange rate by current administration received enormous support but for the economy to reap the benefits, Nigerians must change their 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’s simple economics. For me, whenever, the CBN is doing will make impact if the policies they put in place are implemented in term of increasing our dollar receipt, our revenue and we continue to export more and when we receive this, we will see the value of naira continue to stabilise.
“Yes, we must be a productive economy, we must be able to produce and export that’s the only way to grow an economy. We cannot have an economy when we continue to import. Government have to change their attitude as well when it comes to Importation, we need to see how to increase our export and ensure no leakages and increase our revenue if we do this, we will see increase in the value of our national currency,” 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 there also, how many non oil exports do we do, we are not exporting so much and more Nigerians want to continue to import.
“They crave for foreign things and all that. 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.
