How FG Plans to Boost Naira Value to N500-N600/$1 by 2024 and What Experts Think

The Federal Government’s plan to shore up the value of the naira to between N500 and N600 to a dollar by 2024 has been met with skepticism by various private sector institutions and financial experts.

They have expressed divergent views over the feasibility and the benefits of the goal.

They have also advised the government on what it should do to achieve a stable macroeconomic environment that will address exchange rate instability.

The Special Adviser to the President on Economic Matters, Dr Tope Fasua, speaking at the “Cowries to Cash” lecture and launch in Abuja on Tuesday, hinted on the Federal Government’s plan to strengthen the naira.

He attributed the recent appreciation of the naira to the policies being implemented by the government. He warned Nigerians hoarding foreign currencies with the hope that the local currency will continue to fall, saying that the policies of the government will shock them.

He said: “For those who are speculating and praying and wishing that the currency would become nonsense, I believe that policies being rolled out by the Central Bank and the Federal Government that I serve, led by the President Bola Tinubu, will shock some of them.

“You know, he has some very great ideas coming up. Some of them are what you’ve seen reversing the fall in the value of the naira, but he has also challenged us to review forward many of the targets, for example, the idea that Nigeria’s economy will get to a trillion dollars. He wants to achieve it by 2026.

“Some people thought the naira will continue to lose value. Of course, we can already see what’s going on and the naira will strengthen even further to may be N500 or N600. I’m beginning to see some of those.”

However, the Nigeria Employers Consultative Association, NECA, and economy experts have questioned the viability of the plan and urged the government to disclose and clarify the working policy plans.

They added that the government should focus on local production, address the nation’s propensity to import, make the fiscal and monetary policy authorities work in sync, among other things, before dreaming of a lower exchange rate.

The Director-General of NECA, Mr Adewale-Smatt Oyerinde, urged the government to deepen engagement with organized businesses with the view of building greater consensus and support for the on-going reforms.

Oyerinde stated: “We note the plan by the Government to shore up the value of the Naira to between N500 and N600 to a Dollar in 2024. This plan is quite commendable and ambitious.

“While we commend the plan, it is instructive to note that this will require deliberate and focused plan of action to address the shortfall in Dollar supply”.

Olatunde Amolegbe, immediate past President of Chartered Institute of Stockbrokers, CIS, said he had not seen any working paper on how the exchange rate goal will be achieved, and wondered how they would achieve it.

He stated: “Though I have not seen where they stated this, how they intend to do it is still unclear to me. We certainly do not have enough information that points to how this will happen in the medium term”.

Nnamdi Nwizu, of Co-Founder, Comercio Partners Limited, said: “ It is good to see the fiscal and monetary policy authorities working in sync. We have not seen that in a while.

“However, we need them to shed more light on actions being taken and how they intend to use them to strengthen the economy and ensure we have more exports to help the currency.

“I am not sure that a reorganisation of the banking sector is the solution to the exchange rate problem. We need to address the structural issues that make us dependent on imports and create an enabling environment for local production and export diversification.”

He added that the government should not be giving exchange rate targets, but rather focus on the fundamentals that determine the value of the currency. He said that the exchange rate is a reflection of the demand and supply of foreign exchange, and that the government should not interfere with the market forces.

He also said that the government should not rely on external borrowing to finance its budget deficit, but rather adopt a more prudent fiscal policy that will reduce the pressure on the naira. He said that the government should also improve its revenue generation and allocation, and invest in critical infrastructure and human capital development.

Mallam Garba Kurfi, Managing Director/CEO, APT Securities & Funds, described the proposition as a welcome development, saying it will lead to a fall in inflation rate in the long run.

He stated: “It is a good development and we will wait to see the plan. If the apex bank decided to do that it is good since they are the most realisable sources of FX. In this context, they are referring to restructuring the banking system for a desired result”.

He further said: “It is a welcome development and if they can achieve that, our inflation will come down because it is cost-push inflation.

“With that, achieving $1 trillion Gross Domestic Product, GDP, as the President promised, will be possible. We will wait to see the monetary and fiscal policies that will make that achievable.”

On his part, Ambrose Omordion, an analyst at Invesdata Consulting Limited, said the exchange rate goal is possible, arguing, however, that dollar inflow from the World Bank and other multilateral organisations will help boost the nation’s foreign exchange earnings.

His words: “It’s possible if government will do the needful. Why I said it’s possible is that because for more than one year, the price of crude oil in the international market has remained above $80 dollars. If we are producing at capacity to meet our OPEC quota, it will increase our forex earnings.


NECA and the financial experts, however, made recommendations on how the Federal Government can achieve the desired exchange rate target.

NECA in its recommendation said: “To achieve this, the government must urgently address the nation’s propensity to import, including the fixing and or privatization of the national refineries, ensure maximum crude production in line with OPEC quota and promote local production.

“Without producing what we consume, the nation will continue to conspire to put pressure on the Naira, leading to its continued weak state.

“We urge government, in this line to continue to deepen engagement with organized businesses, with the view of building greater consensus and support for the on-going reforms.”

Also, Amolegbe said: “The continuing mop-up of system liquidity via the resumption in the issuance of treasury instruments at significantly higher rates could slow the flows of money going towards the FX market as well as encourage increased foreign investment inflows.

‘’This will need to be coupled with some other significant measures in order to achieve the stated target exchange rate.”

In his recommendation, Nwizu said: “Instead of focusing on reforms, the Ease of Export or Doing Business, should be considered.”

Recommending, Omordion said: “The World Bank has said it’s giving us an interest-free loan facility of $1.5 billion. African Development Bank has also made similar promises to Nigeria. Not only that, we need to encourage more exports from Nigeria.

“We also need to encourage Nigerians abroad to repatriate funds back to the country in hard currency.

“There is need to check the elites, including the political class, who buy and stock dollars. If politicians are not converting their naira to dollar and storing it in their accounts, we won’t be seeing the dollar scarcity.

‘’So, the EFCC should move in and monitor bank accounts of every Nigerian and know those that are stocking dollars in their domiciliary accounts.

“These are the things we should be doing to increase supply. It’s doable but the government needs to encourage production, rather than depending on importation. When we start producing, it will reduce the pressure on dollar demands.

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