Naira To Exchange Against US Dollar At N1,000 Before End Of 2024 – Presidency

The Presidency has predicted that the Nigerian currency, the Naira, will exchange at N1000 against the United States (US) Dollar before the end of 2024.

This is as the presidency reflects on how the local currency suffered some months of the storm, sliding as low as N1,900 to the US dollar earlier.

The Special Adviser to President Bola Ahmed Tinubu, on Information and Strategy, Bayo Onanuga, noted this on Sunday while reacting to a report credited to Ruth Maclean and Ismail Auwal.

Onanuga sternly criticized the report published in the New York Times which berated the Nigerian economy as facing the worst trajectory in a generation.

The Presidency has expressed its dissatisfaction with the feature story titled ‘Nigeria Confronts Its Worst Economic Crisis in a Generation’, which was published on June 11.

The government believes that this article reflects the long-standing trend of foreign media outlets reporting on African countries in a predetermined, reductionist, derogatory, and denigrating manner.

The Special Adviser on Information and Strategy has stated that due to the ‘misleading’ nature of the report, it is necessary for the government to address some misconceptions conveyed by the reporters regarding the economic policies of President Tinubu’s administration, which assumed power at the end of May 2023.

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One significant point highlighted in the report is the portrayal of the dire experiences faced by some Nigerians amidst the inflationary spiral of the past year, with all blame placed on the policies of the new administration.

Furthermore, the report, which is based on several interviews, is criticized for being biased, excessively negative, and failing to acknowledge the positive aspects of the economy, as well as the ameliorative policies being implemented by both the central and state governments.

Onanuga, the presidential aide, further emphasized that the economic problems faced by Nigeria today were not created by Tinubu, but rather inherited by him.

He noted: “As a respected economist in our country once put it, Tinubu inherited a dead economy. The economy was bleeding and needed quick surgery to avoid being plunged into the abyss, as happened in Zimbabwe and Venezuela.”

Onanuga explained that the government’s policy direction in May/June 2023 was influenced by the background of the abrogation of the fuel subsidy regime and the unification of the multiple exchange rates.

He emphasized that Nigeria had been maintaining a fuel subsidy regime for decades, which had resulted in a staggering $84.39 billion being drained from the public treasury between 2005 and 2022.

This was a significant burden for a country with substantial infrastructural deficits and a pressing need for improved social services for its citizens.

Onanuga further alleged that the state oil firm, NNPCL, had accumulated trillions of Naira in debts due to unsustainable subsidy payments.

He also highlighted that there was no provision for fuel subsidy payments in the national budget beyond June 2023, when Tinubu assumed leadership of the country.

“The budget itself had a striking feature: it planned to spend 97 per cent of revenue servicing debt, with little left for recurrent or capital expenditure. The previous government had resorted to massive borrowing to cover such costs. Like oil, the exchange rate was also being subsidized by the government, with an estimated $1.5 billion spent monthly by the CBN to ‘defend’ the currency against the unquenchable demand for the dollar by the country’s import-dependent economy.

“By keeping the rate low, arbitrage grew as a gulf existed between the official rate and the rate being used by over 5000 BDCs that were previously licensed by the Central Bank. What was more, the country was failing to fulfil its remittance obligations to airlines and other foreign businesses, such that FDIs and investment in the oil sector dried up, and notably Emirate Airlines cut off the Nigerian route,” he said.

Onanuga said to deal with the cancer of public finance, Tinubu on his first day, rolled back the subsidy regime and the generosity that spread to neighbouring countries. Then, his administration floated the naira.

He said, “After some months of the storm, with the naira sliding as low as N1,900 to the US dollar, some stability is being restored, though there remain some challenges. The exchange rate is now below N1500 to the dollar, and there are prospects that the naira could regain its muscle and appreciate to between N1000 and N1200 before the end of the year.

“The economy recorded a trade surplus of N6.52 trillion in Q1, as against a deficit of N1.4 trillion in Q4 of 2023. Portfolio investors have streamed in as long-term investors. When Diageo wanted to sell its stake in Guinness Nigeria, it had the Singaporean conglomerate, Tolaram, ready for the uptake. With the World Bank extending a $2.25 billion loan and other loans by the AfDB and Afreximbank coming in, Nigeria has become bankable again. This is all because the reforms being implemented have restored some confidence.

“The inflationary rate is slowing down, as shown in the figures released by the National Bureau of Statistics for April. Food inflation remains the biggest challenge, and the government is working very hard to rein it in with increased agricultural production.

“The Tinubu administration and the 36 states are working assiduously to produce food in abundance to reduce the cost. Some state governments, such as Lagos and Akwa Ibom, have set up retail shops to sell raw food items to residents at a lower price than the market price.

“The Tinubu government, in November last year, in consonance with its food emergency declaration, invested heavily in dry-season farming, giving farmers incentives to produce wheat, maize, and rice. The CBN has donated N100 billion worth of fertiliser to farmers, and numerous incentives are being implemented. In the western part of Nigeria, the six governors have announced plans to invest massively in agriculture.

“With all the plans being executed, inflation, especially food inflation, will soon be tamed.

“Nigeria is not the only country in the world facing a rising cost of living crisis. The USA, too, is contending with a similar crisis, with families finding it hard to make ends meet. US Treasury Secretary Janet Yellen raised this concern recently. Europe is similarly in the throes of a cost-of-living crisis. As those countries are trying to confront the problem, the Tinubu administration is also working hard to overturn the economic problems in Nigeria.

“Our country faced economic difficulties in the past, an experience that has been captured in folk songs. Just like we overcame then, we shall overcome our present difficulties very soon.”