Connect with us


How FG can salvage Naira – Johnson Chukwu


“The Federal Government should seek a $10billion currency support line from its trading partners; set a limit for the falling Naira,  fix infrastructure and pursue the diversification drive with vigour”.
These are the pieces of advice by a cross-section of Nigerians on how best to salvage the Naira, whose worth continues to fall like a heavy Lead at the black market.For instance, as at yesterday, it was quoted at N455 to the dollar on the black market. Even last month,the currency was sold at N495 per dollar. “From a technical standpoint, the Naira is heavily bearish and this negative momentum could open a path towards 500 and potential higher against the Dollar on the black market exchange”, says Lukman Otunuga, a Research Analyst with Forex Time (FXTM) on an online investment note.
But how can the nation reverse this trend?
Mr. Johnson Chukwu, the Managing Director of Cowry Assets Management Limited, advised the Federal Government to seek bilateral or multilateral loans to buffer the currency since the CBN can not do so.
His words: “The only thing government can do is to enter into agreement with a multilateral financial agency or a bilateral financial agreement with one of our trading partners to provide financial support, budget support or currency support line of a minimum of $10billion to the government through central bank so that the government will be in a position to meet legitimate demand for forex. The key thing is that confidence has been punctured. Investors , both local and international, complain that we dont have the reserves to meet all the maturing obligations or all our obligations. So they are not bringing in their money. If we want  that change, we need to get a currency or budget support line that is huge enough, that is large enough to ensure that we, as a country, can meet all foreign currency obligations as they are unfolding.As of today, CBN can no longer convince both international and local investors, that it has the muscle to do that. So it has to leverage on entities such as  multilateral financial agencies like the World Bank, the IMF,bilateral partners like China or any of them to give the investing public that confidence that the country have the resources  to meet all its obligations.”
He, however, warns: “If the situation persists, the contracting economy will accelerate, so you are going to have a high level contraction.If we do not stop the deterioration in the exchange rate because most companies can no longer afford to bring in their raw materials and equipment they need for manufacturing purpose.The cost of consumables is going to adjust upward to the level that  majority of Nigerians can no longer afford to buy basic necessities of life.”
Professor Garba Sheka, Professor of Economics at Bayero University, Kano, advised that Nigerians should shun patronage of foreign goods in order to conserve the scarce forex.
In Good Morning Nigeria, an NTA programme, the universituy don also urged  that diversification should be pursued vigorously.
His words: “There should be vigorous campaign to enlighten Nigerians to start patronising goods made in Nigeria. That will reduce our import dependence significantly.
“Again, we  should set a target. We should not allow the currency to float like that.The CBN should have a target like the US and other countries have. W e should not allow the market forces to determine the currency rate completely. We should also reject completely or drop the idea of selling the national assets in order to support the economy. I dont think that is a very good advice .It is a very wrong advice, and I think government would not take that.
“To boost the value of the Naira is a question of diversifying the economy. Of course, diversification requires huge amount of money to put the infrastructure in place.Then to come up with good policies so that prices of our manufactured goods and other goods can be competitive in the world market.
As for Professor Olanrewaju Olaniyan of Economics Departmnet of the University of Ibadan,the monetary authority should close the exchange rates gap between the official and black market.
“Once you have the gap between the official rate and black market rate at that large,which is close to 35 per cent of the value, then it gives opportunity for arbitrage.”
People understand that they can make profit by just buying that particular currency, holding for some time and sell it.So the solution to that is that we need to close that gap. Unfortunately, the ability of policies to close that gap is also limited during the structure that we have now. The economy is stagnant and there is high inflation.So both policies have to be worked out very carefully and  keenly for us to be able to reduce that.It will not be in the interest of the economy to go extremely floating it now because at the rate at which the Naira is going, if we completely float it, the Naira will soon hit something like N800 to N900 per dollar. But even when the CBN can not afford to float and still peg, you still require your reserves as a background so that it can hold forte for you. One thing we need to do is to find a way of shoring up that our reserves in such a way that we can do that. Those are the quick things that I know that we can do now, but the longer ones are to diversify; increase agric output. But agric output essentially has problem in the sense that the farmers are extremely poor, and they are not poor because they are not producing. They are poor because the farm produce aggregate prices are extremely low.There would still be need at a point in time for government to assure farmers that they will get value for their efforts.
Diversification is key in the longer terms.And for us to diversify into manufacturing that can give us these foreign currencies, our infrastructure has to be improved.In the last couple of years, we have seen some improvement.This improvement must translate into the perception of the manufacturers .

Continue Reading
Click to comment

Leave a Reply


12-year-old boy kills landlady as condition to be initiated into a cult

Ethiope East Local

A 12-year-old boy, who allegedly robbed and killed his landlady at Abraka, Ethiope East Local Government Area, Delta State, yesterday, was among those paraded for various offences by the state Police Command, yesterday.


The state Commissioner of Police, Mr. Zanna Mohammed, who briefed reporters on the arrest of over 60 kidnappers, robbers, murderers, cultists and ritualists in the last three weeks, said the teenager confessed that he committed the act because a cult group told him that one of the conditions for initiation was that he must have been involved in a criminal act.

Continue Reading


Super Falcons striker, Asisat Oshoala, comes to Falz defence with regards to statement about glorifying fraudsters

Asisat Oshoala

Nigerian professional footballer, Asisat Oshoala, who plays as a forward in the Chinese Women’s Super league for Dalian Quanjian F.C., took to her Instagram to express deep concern about how people are now proud to be fraudsters.



In Falz’ defense, she insisted fraudsters shouldn’t be glorified.

Continue Reading


Zimbabwean Church leader in s*x scandal as photos naked photos and sex acts with 33 girls is exposed

Church leader
A Zimbabwean church leader, Nyasha Light Nyatsungo is enmeshed in a sex scandal and might also be facing legal action, after his ex-girlfriend flooded social media with his nude photo.
It was gathered that the Nyatsungo allegedly sent a nude picture of his Cape Town based ex–side chick, Shingi Mavenge, to his other girlfriend only identified as Beula who later broadcasted it on social media.
According to H-Metro, in an apparent fit of rage, Mavenge posted a WhatsApp chat she had with Nyatsungo’s wife identified as Nyasha Nhahumbi as well as a group chat with some of her former lover’s concubines.
According to Mavenge, she has gotten information that Nyatsungo has at least 33 girlfriends and has ditched his wife of eight years.
She adds that Nyatsungo bedded a girl who was their neighbour as well.
Mavenge said that the church leader’s wife revealed that they even consulted their local pastor in Mutare who failed in his attempts to mend Nyatsungo’s ways.
According to H-Metro, Nyatsungo, a married father of two, has denied ever circulating the picture, labelling Mavenge as a bitter woman whom he just flirted with on Facebook and nothing more.
“This Nyasha guy must be stopped in his tracks. He is going to pay for all the damage that he has done to me. He was the only one who had that leaked picture and I am shocked why he would forward it to some other girl,” fumed Mavhenge who is working on taking legal action.
“I started dating this guy in 2015 and never knew he was married. He lied.”  fumed Mavenge yesterday.
“That guy is full of lies and at some point, we opened a group chat with his wife and some of his girlfriends. He normally targets single mothers” added Mavenge.
H-Metro was furnished with six other cellphone numbers of his girlfriend that include Fadzai, Mutsa, Essy, Juliana, Barbra among others. Mutsa confirmed she once had a relationship with Nyatsungo have since terminated it since she discovered he was married.
Mavenge confirmed they met once in Johannesburg when she had to fly from Cape Town to meet her man sometime in April.
“That night he didn’t even have money. I had to pay the R800 for the accommodation as he had no money. He wanted to have sex with me but I flatly refused. He even wanted it without protection and I said No. he looked terrible with clothes in a plastic shopping bag. I want to write a letter to Pastor Rex who is the head of (the church) in Harare so that this guy be stopped with his tricks and lies,” added Mavenge.
When contacted over the phone in Mutare Nyatsungo confirmed he knew Mavenge but never had a relationship with her.
“I know her and we once flirted on Facebook. We never had a relationship as she is alleging. I don’t know why she is bitter. I haven’t seen the nude pictures she is talking about but I heard about it from Beula. We live in a democratic country. She can go ahead and sue me if she feels her rights have been infringed upon. All the allegations she is making are false and I don’t know her motive in trying to tarnish my image,” said Nyatsungo.
He said he was still with his wife whose phone rang without response yesterday afternoon. Despite his denials, H-metro was furnished with pictures of Nyatsungo and Mavenge, the time they met in April.

Continue Reading