By Bukola Kuteyi
Credit rating agency, Fitch Ratings has raised concerns about the potential negative impact of the proposed foreign currency gateway bank announced by the Central Bank of Nigeria (CBN) on the liquidity of Nigerian banks.
According to Fitch Ratings, the Nigerian naira has experienced a significant devaluation, with the exchange rate reaching N1,516/$ as of February 13, 2024.
This depreciation trend follows a historical performance low, with the naira currently trading unofficially at N1,673/$ in the parallel forex market.
Despite the CBN’s efforts to bolster the supply of foreign exchange through various policies, positive results have yet to materialize.
The recent policy announcement aimed at ensuring international oil companies remit 100 per cent of their forex proceeds has not yielded the desired outcomes.
The depreciation of the naira has led to inflationary pressures, resulting in increased prices of goods and services in the market. This has made living conditions difficult for average Nigerians, prompting protests in some states.
Experts React
Experts, including Bosun Obembe, a fixed income trader for Access Bank, have highlighted the uncertainty among citizens despite CBN policies. The preference for foreign goods over locally made products has contributed to the depreciation of the naira.
In response to the economic challenges, the Nigeria Customs Service has initiated the sale of rice and other food items at subsidized rates to alleviate the burden on citizens.
Similarly, Governor Dapo Abiodun of Ogun State has announced plans to provide subsidized rice to residents, with eligibility criteria based on the National Identification Number (NIN).
Public Reactions
While some citizens appreciate the government’s efforts, others express concerns about the effectiveness and fairness of the initiatives. Many emphasize the need for improved implementation to ensure that assistance reaches all segments of society, including informal labor sectors and self-employed individuals.
@AkintundAA01 tweeted: “Thank you sir, but there is nothing for the poor woman selling Agbado or the poor taxi driver. I think informal labor sectors and self-employed citizens also need palliative. Thank you sir.”
Similarly, @Dayoige5 commented: “The initiative is good, but implementation is the problem. How do you think brilliantly and yet still have poor execution in the state? You have very hungry and greedy individuals around you. They don’t think about masses who don’t fall within their family. You shouldn’t fail 2ce.”
