The Central Bank of Nigeria (CBN) has implored Nigerians to exercise patience as it tirelessly works to strengthen the Naira amidst prevailing economic challenges. This reassurance was given during the 2024 public lecture titled “Recent Developments in the Nigerian Foreign Exchange Market: Issues, Options and Way Forward,” organized by the Nigerian Economic Society at the CBN Centre of Excellence Hall, University of Ibadan.
Dr. Usman Opanachi, representing CBN Governor Dr. Olayemi Cardoso at the event, emphasized that whenever the Naira faces challenges, the CBN is simultaneously undergoing scrutiny. He conveyed the commitment of the CBN’s management to address the issues, stating, “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.”
Discussing the longstanding issue of excess demand for forex in Nigeria, Opanachi acknowledged the bank’s historical efforts to tackle this problem through various strategies. However, he noted that these strategies provided only temporary relief. Opanachi highlighted the shift in the CBN’s approach, embracing market forces to play a more significant role in determining the Naira’s price.
The CBN clarified its role, stating, “The Central Bank of Nigeria does not supply or produce dollars; It is naira that it produces.” Opanachi explained that artificially holding down the price of a commodity determined by forex becomes unsustainable over time. The current management of the CBN adopts a market forces approach, allowing market dynamics to play a more prominent role in setting the Naira’s price.
Renowned economist Prof. Sam Olofin, delivering the public lecture, expressed skepticism about the CBN’s ability to control the foreign exchange market, citing the dominance of parallel market forces. He emphasized the powerful influence of market forces and highlighted legal constraints preventing interference in the parallel markets.
In his welcome address, the President of the Nigerian Economic Society, Prof. Adeola Adenikinju, stressed the critical importance of the exchange rate in Nigeria’s current economic discourse. He advocated for consultation with economists to address the weakened economy, acknowledging the high pass-through effect from the exchange rate to inflation.
The Chairman of the event, Prof. Antonia Simbine, and the Vice Chancellor of the University of Ibadan, Prof. Kayode Adebowale, or his representative, also emphasized the significance of finding solutions to the economic challenges facing Nigerians.
