{"id":11921,"date":"2017-03-31T14:43:03","date_gmt":"2017-03-31T13:43:03","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=11921"},"modified":"2017-03-31T14:43:03","modified_gmt":"2017-03-31T13:43:03","slug":"how-cbn-can-sustain-naira-growth-experts","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/","title":{"rendered":"How CBN can sustain Naira growth \u2013 Experts"},"content":{"rendered":"

The Central Bank of Nigeria has made moves to strengthen the naira currency to boost domestic manufacturing and lift the economy out of the recession caused by the slump in global oil prices.<\/p>\n

But analysts said the measures do not go far enough and foreign investment would only return to Africa\u2019s most populous nation once the market determines the currency\u2019s true value.<\/p>\n

The naira has lost value against the US dollar, as Nigeria saw revenues from international oil sales dwindle because of the worldwide slump in crude prices.<\/p>\n

Stalled investment has led to a shortage of foreign currency, making it harder for local businesses to source enough dollars to pay for imported raw materials and machinery.<\/p>\n

It has also caused a yawning gulf between the official rate and that on the illegal but tolerated, black market.<\/p>\n

The Central Bank of Nigeria (CBN) currently sells dollars in the country\u2019s multiple forex markets at 315 to 375 naira, allowing dealers to make a small profit on customer transactions.<\/p>\n

This week it directed commercial banks to sell at 360 compared with the previous rate of 375, to forex users wanting to pay overseas school fees, medical bills and other \u201cinvisibles\u201d.<\/p>\n

\u201cWe believe that what has been driving the parallel market rate, apart from speculation, has been some of the invisibles,\u201d bank spokesman Isaac Okorafor told AFP.<\/p>\n

\u2013 \u2018Not healthy\u2019 \u2013<\/strong>
\nNigeria\u2019s President Muhammadu Buhari has stated he does not want the market to determine the value of the naira and argued devaluation would \u201ckill\u201d the currency.<\/p>\n

Since mid-February, the CBN has been pumping dollars into the market to strengthen the naira and bridge the gap between official and black market rates.<\/p>\n

Official data show some $2.5 billion have been sold to end users, causing the local currency to rally to 380 on the open market as of Thursday, compared with a previous dollar high of around 520.<\/p>\n

Monetary policy in recent months has been aimed at encouraging local production of what has previously been imported at huge cost.<\/p>\n

In June 2015, the CBN prohibited 41 items, including tooth picks and luxury jets, from the official forex window.<\/p>\n

Okorafor maintained the policy had \u201crejuvenated domestic production\u201d, providing \u201can opportunity to change the economy\u2019s structure, resuscitate local manufacturing\u201d and create jobs.<\/p>\n

The head of the Manufacturers\u2019 Association of Nigeria, Frank Jacobs, said any move to strengthen the naira was \u201ca positive development\u201d, as not all members sourced forex officially.<\/p>\n

\u201cSome manufacturers, especially the small-scale firms and those affected by the ban of the 41 items, source their dollars from the bureaus de change and the black market,\u201d he added.<\/p>

\r\n
Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

\u201cLowering the rates will definitely help them and the economy.\u201d<\/p>\n

Financial analysts, industry operators and the International Monetary Fund, however, said the bank needed to go further and harmonise all of Nigeria\u2019s forex market rates.<\/p>\n

Bismarck Rewane, of the Financial Derivatives consultancy in Lagos, added: \u201cA situation where the central bank is the sole supplier of forex is not healthy.<\/p>\n

\u201cIt is creating an air of uncertainty for investors. The CBN is artificially funding the market to punish speculators and hoarders.\u201d<\/p>\n

Of particular concern was the use of foreign reserves to shore up the naira, he said.<\/p>\n

\u201cWe are using up in six weeks what we ought to use for six months. This is not sustainable,\u201d he said, urging the CBN \u201cto move towards a market-driven\u201d forex market.<\/p>\n

That would give greater certainty for currently wary investors, he added.<\/p>\n

\u2013 Precarious situation \u2013<\/strong>
\nThe director-general of the Lagos Chamber of Commerce and Industry, Muda Yusuf, said businesses had greeted the bank\u2019s move this week with \u201crelief\u201d.<\/p>\n

\u201cGradually investors confidence is returning to the economy,\u201d he said. But he also expressed concern about whether the policy was sustainable.<\/p>\n

\u201cHow far can the CBN go in making dollars readily available to industries and importers?\u201d<\/p>\n

OPEC member Nigeria relies on crude oil sales for 90 percent of its foreign exchange earnings and 70 percent of government revenue, making it particularly vulnerable to global shocks.<\/p>\n

Crude prices have rallied internationally since the slump began in mid-2014, while militant attacks that hit production in Nigeria\u2019s oil-rich south have tailed off, Yusuf noted.<\/p>\n

But he said the situation was still precarious.<\/p>\n

\u201cThe CBN should further liberalise the FX market to allow for other inflows of forex. If the current supply source dries up, we may be back to zero,\u201d he added.<\/p>\n

AFP<\/p>\n","protected":false},"excerpt":{"rendered":"

The Central Bank of Nigeria has made moves to strengthen the naira currency to boost domestic manufacturing and lift the economy out of the recession caused by the slump in global oil prices. But analysts said the measures do not go far enough and foreign investment would only return to Africa\u2019s most populous nation once …<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[17],"tags":[36],"coauthors":[2392,2393],"class_list":["post-11921","post","type-post","status-publish","format-standard","","category-news","tag-cbn"],"yoast_head":"\nHow CBN can sustain Naira growth \u2013 Experts - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How CBN can sustain Naira growth \u2013 Experts - National Wire\" \/>\n<meta property=\"og:description\" content=\"The Central Bank of Nigeria has made moves to strengthen the naira currency to boost domestic manufacturing and lift the economy out of the recession caused by the slump in global oil prices. But analysts said the measures do not go far enough and foreign investment would only return to Africa\u2019s most populous nation once …\" \/>\n<meta property=\"og:url\" content=\"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/\" \/>\n<meta property=\"og:site_name\" content=\"National Wire\" \/>\n<meta property=\"article:published_time\" content=\"2017-03-31T13:43:03+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Dayo Emmanuel\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/nationalwire.com.ng\/sub\/#website\",\"url\":\"https:\/\/nationalwire.com.ng\/sub\/\",\"name\":\"National Wire\",\"description\":\"About Nigerians, Nigerian Business and Other Stories\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/nationalwire.com.ng\/sub\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/#webpage\",\"url\":\"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/\",\"name\":\"How CBN can sustain Naira growth \u2013 Experts - National Wire\",\"isPartOf\":{\"@id\":\"https:\/\/nationalwire.com.ng\/sub\/#website\"},\"datePublished\":\"2017-03-31T13:43:03+00:00\",\"dateModified\":\"2017-03-31T13:43:03+00:00\",\"author\":{\"@id\":\"https:\/\/nationalwire.com.ng\/sub\/#\/schema\/person\/806673c5851717dc3067b1a46a6c060f\"},\"breadcrumb\":{\"@id\":\"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/nationalwire.com.ng\/sub\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How CBN can sustain Naira growth \u2013 Experts\"}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/nationalwire.com.ng\/sub\/#\/schema\/person\/806673c5851717dc3067b1a46a6c060f\",\"name\":\"Dayo Emmanuel\",\"url\":\"https:\/\/nationalwire.com.ng\/sub\/author\/dayo\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How CBN can sustain Naira growth \u2013 Experts - National Wire","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/","og_locale":"en_US","og_type":"article","og_title":"How CBN can sustain Naira growth \u2013 Experts - National Wire","og_description":"The Central Bank of Nigeria has made moves to strengthen the naira currency to boost domestic manufacturing and lift the economy out of the recession caused by the slump in global oil prices. But analysts said the measures do not go far enough and foreign investment would only return to Africa\u2019s most populous nation once …","og_url":"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/","og_site_name":"National Wire","article_published_time":"2017-03-31T13:43:03+00:00","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Dayo Emmanuel","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebSite","@id":"https:\/\/nationalwire.com.ng\/sub\/#website","url":"https:\/\/nationalwire.com.ng\/sub\/","name":"National Wire","description":"About Nigerians, Nigerian Business and Other Stories","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/nationalwire.com.ng\/sub\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/#webpage","url":"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/","name":"How CBN can sustain Naira growth \u2013 Experts - National Wire","isPartOf":{"@id":"https:\/\/nationalwire.com.ng\/sub\/#website"},"datePublished":"2017-03-31T13:43:03+00:00","dateModified":"2017-03-31T13:43:03+00:00","author":{"@id":"https:\/\/nationalwire.com.ng\/sub\/#\/schema\/person\/806673c5851717dc3067b1a46a6c060f"},"breadcrumb":{"@id":"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/nationalwire.com.ng\/sub\/how-cbn-can-sustain-naira-growth-experts\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/nationalwire.com.ng\/sub\/"},{"@type":"ListItem","position":2,"name":"How CBN can sustain Naira growth \u2013 Experts"}]},{"@type":"Person","@id":"https:\/\/nationalwire.com.ng\/sub\/#\/schema\/person\/806673c5851717dc3067b1a46a6c060f","name":"Dayo Emmanuel","url":"https:\/\/nationalwire.com.ng\/sub\/author\/dayo\/"}]}},"_links":{"self":[{"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/posts\/11921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/comments?post=11921"}],"version-history":[{"count":1,"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/posts\/11921\/revisions"}],"predecessor-version":[{"id":11922,"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/posts\/11921\/revisions\/11922"}],"wp:attachment":[{"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/media?parent=11921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/categories?post=11921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/tags?post=11921"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/nationalwire.com.ng\/sub\/wp-json\/wp\/v2\/coauthors?post=11921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}