Nigeria’s vice president Yemi Osinbajo on Wednesday said Nigeria needs to review her foreign exchange policies, including further consideration for possible devaluation of the Naira.
Nigeria is one of the countries affected by the global oil glut that have reduced revenues of oil nations by 70 percent. Africa’s largest economy situation was further compounded by the refusal of President Muhammadu Buhari to make a realistic adjustment to the nation’s foreign exchange rate in order to accommodate the shortfall created by the oil glut.
Currently, production in the region has dropped to its lowest in 20 years, according to a NNPC report released last month. While inflation reportedly jumped to four year high in March.
“It’s clear that a strategy of demand management alone won’t take us far,” Osinbajo said at a conference in Lagos, on Wednesday. “We need to address the issue of supply. We think a review is necessary. But I can’t give a time.”
The federal government is discussing how to manage foreign exchange supplies with the central bank, which is in charge of the momentary policy, devaluation may feature in the talks with the bank, he said.
“There has to be a substantial re-evaluation of the foreign exchange policy especially with the view to increasing FX supply and capital importation,” he said, adding that he’s “confident” that measures can be put in place to “attract FX.”
International Monetary Fund and investors have called on the government to devalue the Naira to lessen the scarcity of the dollar and economic gridlock affecting both foreign and local businesses, but the government insists on the current pegged rate of 197-199 per dollar.