Analysts have argued that the dollar scarcity in the economy is due to the lack of clarity around Nigeria’s foreign exchange policy and investors’ aversion to the Central Bank of Nigeria’s demand-management strategies.
They expressed fears that further devaluation of the nation’s currency might not be necessary on the strength of the pressure on the naira due to speculative attacks and much of the concern for investors lies with the uncertainty around foreign exchange policy.
They advised the Federal Government to strengthen the credibility of fiscal policy to create room for further support in the short term without jeopardising public credit, adding that emergency spending needs to be accompanied by measures that ensure transparency and accountability.
Dr. Muda Yusuf, Founder/CEO Centre for the Promotion of Private Enterprise (CPPE) in an interview said the recent Consumer Price Index (CPI) report by the NBS indicated that Nigeria still has a structural problem, inhibiting both production and exports potential.
According to him, the critical point for the domestic economy is the disequilibrium in the foreign exchange market which has starved businesses of dollars and pushed consumer prices higher.
He expressed optimism that there is room for improvement in the provision and maintenance of infrastructure, investment productivity, and boosting of local business activities to support export activities and strengthen channels for dollar inflow.
In his own opinion, Mr. Taiwo Oyedele, fiscal policy partner and Africa tax leader, PwC advised the fiscal, monetary policy authorities to calibrate reform policies aimed at tightening financial conditions in Nigeria.