The Minister of Budget and National Planning, Atiku Bagudu, expressed confidence that Nigeria’s recent foreign exchange reforms will lead to exchange rate stabilisation.
In comments to business journalists on Friday, Bagudu noted that removing the official rate cap allows market forces to determine the naira’s value. Countries adopting market-based exchange rates have historically seen improved stability, he said.
Global economic indices suggest Nigeria’s forex outlook is improving. Bagudu encouraged local and foreign investors to take advantage of the changing conditions.
The remarks come six months into President Bola Tinubu’s overhaul of Nigeria’s foreign exchange policy. Key changes include allowing the naira to float freely and ending the central bank’s supply of dollars to businesses at subsidised rates.
Bagudu stated that the current administration’s efforts will steady the volatile foreign exchange market over time. Past currency controls created imbalances, he argued.
“We have been deceiving ourselves; we have run a system where we don’t have dollars, or we don’t have foreign exchange anymore. It has to be a willing-buyer, willing-seller market,” Bagudu said.
He acknowledged short-term naira fluctuations under a liberalised regime but said long-run stability relies on market forces determining currency valuation and allocation.
Bagudu also discussed Nigeria’s declining dependence on borrowing to fund fiscal deficits. The government is focused on raising internal revenues to achieve fiscal and monetary equilibrium, he noted.
The minister urged citizens to demand accountability from underperforming public officials, including their resignations.
“If you cannot help us, then you may consider leaving,” Bagudu said, echoing President Tinubu’s call for results-based governance.
Bagudu believes Nigeria can realistically produce 1.78 million barrels of oil per day in 2024, as budgeted. But responsibility lies with institutions like the Nigerian National Petroleum Company Limited (NNPC) to meet their mandates.
Nigeria has exceeded 2 million barrels per day previously, Bagudu noted. Boosting oil output brings vital foreign currency earnings to stabilise exchange rates over time, he added.