The Central Bank of Nigeria needs to get its foreign exchange policy right to attract the needed investors that will improve the supply of the dollar this year, the Lagos Chamber of Commerce and Industry has said.
The Director-General of the LCCI, Muda Yusuf, said this in an interview on Wednesday
Nigeria’s foreign exchange policy had in 2020 deterred investment in Africa’s biggest economy. But the apex bank has since moved for a slow path to converge the rates.
The apex bank in December 2020 moved the rates at the Investors and Export Window from N394 per dollar to N420.
The movement to N420 by the CBN is getting closer to the rate at the parallel market which is currently at N470 as of the early hours of Wednesday.
At the official rate, the CBN pegged the price at N379 per dollar. The collapse in oil in March made the apex bank to adjust the rates to N360 per dollar from the N307 previously held in 2015.
Speaking on the development, Mr. Yusuf said, “The Exchange rate that we have is not a good thing for the market, so when we make the rates market driven and we unify the rates, it will bring stability to the market, it will inspire more confidence.
“That step is in alignment with the exchange rate unification, which in the long run will be better for the economy.”
The LCCI DG noted that the apex bank’s move to unify the naira at the different markets was not particularly centered on the demands of international lenders.
In 2020 the the Federal Government was pressured by the World Bank and the International Monetary Fund to converge the naira as a condition to secure loans from the lenders.
Mr. Yusuf said, “It is not even so much about the World Bank or the IMF, the issue is about getting the policies right. It is just in our own interest to get the policies right.
“If getting the policies right now resonates with the IMF, that is fine. But we believe that apart from the IMF or the World Bank, we can unify the rates so that we can also improve the supply side of the foreign exchange market. Because under the previous arrangement many people who are willing to bring funds into the economy were reluctant to bring the funds.”