President Bola Tinubu, who won the 2023 presidential election under the All Progressives Congress (APC) platform, has made a call to investors to invest in Nigeria, saying that the country offers a unique opportunity that cannot be found elsewhere in the world.
He made this call as he rang the closing bell of NASDAQ in New York, where he also assured prospective investors that his administration would provide them with all the support they need to succeed.
However, Tinubu’s efforts to woo investors into the country have been met with a major challenge, as the naira has plunged to around N1000/$1 in the parallel market, according to Bloomberg.
The report also said that the plunge in the exchange rate is in contrast with Tinubu’s promise to unify the multiple exchange rates in the market and allow free movement of capital.
Tinubu had announced that the Central Bank of Nigeria (CBN) had given commercial banks and dealers in the forex market the green light to sell forex freely at a market-determined rate. He had 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.”
However, Bloomberg reports that the naira plunge has doused much of the optimism generated by Tinubu’s reform program, which he unveiled soon after he took office in June.
The report quoted Ogho Okiti, CEO of ThinkBusiness Africa, as saying: “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.”
Bloomberg also reports that despite Tinubu’s economic reforms and his urge to investors, market players disagree with it as many attribute the latest naira plunge partly to the CBN’s failure to supply dollars to the official market. The report said that 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. Some of their suggestions include increasing transparency and accountability, boosting foreign reserves, diversifying export earnings, and supporting domestic production.