Insight & Analysis - October 21, 2021

The Devaluation of the Nigerian Naira Continues: What’s the Way Out?

President of the CIBN, Dr Bayo Olugbemi, provides possible solutions

October 21, 2021

3 min read

The continued devaluation of the Nigerian Naira remains a huge concern for Africa’s largest economy. With a current exchange rate of 1 dollar to 565 Naira, the standard of living for the average Nigerian continues to fall. You’ll hear people lament on the street talking about how “you no even fit buy Coke for N100” in Nigerian pidgin.

President of the Chartered Institute of Banks of Nigeria (CIBN), Dr Bayo Olugbemi, has reinforced a popular opinion surrounding the Naira and what needs to be done to increase its value. Olugbemi states that in order to strengthen the currency, Nigeria must take its local industries more seriously, producing high-quality goods for exports. This way the West African nation can attract foreign exchange and combat the devaluation of the Naira.

In a session with Punch, the CIBN President talked about Nigeria’s overdependence on oil and the negative effect,

“What we need to do to increase the value of naira is to produce goods for export. We have been sending our oil abroad for them to refine and bring it back to us at a higher cost. So, we need to start refining it in Nigeria”, he said.

He encouraged the nation to invest more in agriculture and manufacturing industries in order to meet global standards. This way, Nigerian exports can be sought for by other countries of the world, thus pulling in foreign exchange.

“When we refine in Nigeria, we will spend less foreign exchange. When you have a few forex chasing goods and services to be imported, of course, the value of the naira will go down. Face the real sector and let’s diversify our forex earner. Let’s go to other sectors of the economy like agric”, he added.

The PWC recalls that agriculture was the main source of revenue for Nigeria from 1960 to 1969 and made up an average of 57.0% of the nation’s GDP, generating 64.5% of export earnings. However, all this changed when Nigeria discovered oil and the over-dependence on the natural resource began.