Economic Hardship: Be Patient, We’re Working Day And Night — CBN Tells Nigerians

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Economic Hardship: Be Patient, We’re Working Day And Night — CBN Tells Nigerians

The Central Bank of Nigeria has urged Nigerians to exercise patience as the bank's management is working diligently to strengthen the Naira.

The CBN Governor said this at the 2024 public lecture entitled, “Recent Developments in the Nigerian Foreign Exchange Market: Issues, Options and Way Forward”, organized by the Nigerian Economic Society, NES, at the CBN Centre of Excellence Hall, University of Ibadan yesterday.

Speaking on behalf of the Governor of the Central Bank, Dr Olayemi Cardoso, at the event, Dr Usman Opanachi, Department of Monetary Policy, CBN said, “Anytime Naira is on trial, the CBN is also on trial. We are working day and night to address the challenges and we hope things will work out. “The exchange rate features nearly in every sector. The exchange rate and inflation are very high now. The exchange rate is a problem on its own”.

“Excess demand for forex in Nigeria is a legendary problem. It has just been there and over the years, the bank has implemented various strategies to address this problem. Those strategies have only been able to provide some temporary relief.”

“The Central Bank of Nigeria does not supply or produce dollars; It is naira that it produces. CBN management thinks when you hold the price of a commodity that is determined by Fx down artificially, a time comes when you will not be able to do that.”

“The thinking of the new management of CBN is that the policies you have are intended to address the problem. The approach the management has adopted is the Market forces approach. The bank now allows the market forces to play a greater role in the determination of the price of naira.”

A renowned economist, Prof Sam Olofin, who delivered the public lecture said, it will be difficult for the CBN to control the foreign exchange saying the parallel market forces have taken dominance.

He added that the market forces are so powerful and influential and to worsen the matter, the law that established the foreign exchange does not allow anyone to call them to order.

On the evolution of the Nigerian Foreign Exchange Market, he said, “we are only applying the same old drugs on a patient without any good results.

The parallel markets are outside the purview of the CBN.”

In his welcome address, the President, the Nigerian Economic Society, Prof Adeola Adenikinju advised the FG to consult economists on the weak economy adding, “The choice of today’s theme is apt as it is perhaps the most important issue in Nigeria today. From Aso Rock to the CBN headquarters, and NNPC Towers, from Marina Street in Lagos to Bodija Market in Ibadan, the fish seller in Yenagoa to the suya seller in Sokoto to the farmer in Markurdi, the exchange rate is on the lips of everyone. Hence, the choice of the topic for the 2024 NES Public Lecture.

“The subject of foreign exchange is within the ambit of economics. The exchange rate is a price. However, for an import-dependent economy like ours, it is a price that influences other prices in the economy – products, money, and factor markets. The spike in inflation in the last few months in particular has been largely driven by the exchange rate. The pass-through effect from the exchange rate to other prices is quite high”.

“The government, especially the CBN, has reacted to the sharp and persistent devaluation of the naira with a rash of circular policies. At times, we worry that the effects of a particular policy have not been assessed before others are quickly thrown into the mix. This action tends to add to uncertainty and the flight to safety postures of economic agents, who continue to hold dollars outside the banking system.”

The Chairman of the event, Prof Antonia Simbine, Director General, Nigerian Institute of Social and Economic Research, said all that Nigerians are interested in is the solution to the various challenges.

The Vice Chancellor of the University of Ibadan, Prof Kayode Adebowale was represented by Prof Olamakinde Olapegba, (DVC Administration) at the event.