President Bola Tinubu made a call to foreign investors as he rang the closing bell of NASDAQ saying, “I count on you to invest in Nigeria.”
Despite Tinubu’s efforts to woo investors into the country, the plunge in the exchange rate is in contrast with his efforts.
Call to Investors
During the Nigeria-U.S. Executive Business Roundtable held just after the closing bell, President Tinubu assured prospective investors that while he recognises that investment capital is cowardly, he intentionally brought successful Nigerian industrialists and public officials to share their experiences and operational plans respectively. He said:
“Nigeria is an opportunity that is impossible to replicate or find elsewhere in any part of the world. We have brilliant young people who both innovate and consume on a large scale.
Our entrepreneurial spirit is a major part of what makes our market unique, aside from demography. Nigerians build businesses and Nigerian businesses partner with other businesses to conduct larger business. There is enough value to spread around.
Be careful of what you hear about Nigeria. You may be dissuaded out of a major opportunity that others will take up. We are here for you. We will give you all the support you need to succeed and succeed abundantly.”
Naira unification
Recall that The Central Bank of Nigeria (in line with President Tinubu’s promise to unify the multiple exchange rates in the market) announced that it has given commercial banks and dealers in the forex market the green light to sell forex freely which is a market-determined rate.
Tinubu also reiterated his commitment to this policy in New York where he told investors:
“You’re free to take in your money and bring out your money. I count on you to invest in Nigeria.”
Scarcity of Forex
Earlier reported that the exchange rate between the naira and dollar weakened to around N1000/$1 on Wednesday evening as forex traders continued to struggle with dollar scarcity.
This is coming after the Central Bank said that it is working with the commercial banks to clear the $10 billion foreign exchange backlog within the next 2 weeks.
Bloomberg says that the naira plunge has doused much of the optimism generated by the reform program Tinubu unveiled soon after he took office in June.
“The demand for foreign exchange is currently a stampede. The demand is now not just for imports, but also for store and preservation of value.”
Plunging Naira
Despite economic reforms and his urge to investors, market players disagree with it as many attribute the latest naira plunge partly to the central bank’s failure to supply dollars to the official market.
The gap between the parallel and the I&E window continues to widen after they had initially converged after Tinubu took office.
Experts have weighed in on what Dr. Cardoso (potential new CBN Governor) needs to do to bring back integrity to the apex bank and reforms that need to be done to stabilize the economy.
