How can Nigeria stop the rapidly declining value of the Naira? 

Isaac, Abuja

Government can start by creating an enabling policy environment for savings, investment, and production to thrive, to enable the country to reduce its overall dependence on foreign currency to import goods and services without compensating exports of its own. In this way, the naira will be strengthened because we are reducing what we need to import or also earning to pay for it via our own exports. So, government should create an environment where our local contents, amply fueled from our rich material and labor endowment get more and more significant in whatever we are producing. So in essence, we need to reduce our dependence on foreign savings and borrowings and improve our productive efficiency, among others.

For instance, there is no reason why we shouldn’t be exporting our soups. Every ethnic group in Nigeria produces beautiful, tasty and rich soups. I can assure you that Americans, Japanese, Malaysians, Koreans and Brazilians will buy our soups. However, we don’t yet have the means to package, preserve and export the soup. To make this work, government would need to strengthen the steel and aluminum industry and even the chemical industry (because we need preservative chemicals to preserve the soups). By the time we start exporting, we would be earning so much Forex that our currency will begin to appreciate as forex earning grow in relation to our needs. In addition, we need to improve our economic decision making, reduce corruption and provide efficiency in the supply of infrastructure like power, rail, water, transportation and so on to get the naira back to its value reflective of our resources and productive potential.

Jacob, Lagos

To increase supply from all sides — increase exports of goods and services to earn dollars, drive foreign direct investment, increase foreign portfolio investments, increase foreign remittance. On the demand side, Nigerians must have appetite for locally consumed goods. Various supports must be given to the domestic manufacturers and institutions so that they can increase the quality and quantity of their products and services to enable them to satisfy local demand.

Kolawole, Abeokuta

There are practical ways to increase the value of the naira. One of the sources that enables the supply of foreign currencies into a country is foreign direct investment. Foreign investors bring investment into a country in dollars, therefore, increasing the supply of dollars in that country. When the amount of dollars in circulation in a country increases, the value of the country’s currency begins to increase. However, one thing that scares away foreign investors is rising public debt beyond sustainable level. They fear that the government is headed towards a debt crisis and if they bring in investments, their monies would be trapped, and they would not be able to take their monies back to their countries. Nigeria’s public debt has risen astronomically for years. The current public debt level is apparently unsustainable. While the public debt has been rising, the amount of foreign direct investment into Nigeria has been decreasing steadily. If Nigeria cuts down on public debts to reasonable level, foreign investors confidence in our economy will improve and they will bring in the dollars.

The USD is the global currency that every currency in this world is competing against. Every country would want its currency to stand tall against the dollar and economists have established that if you place two countries side by side, and one country has high inflation rate while the other has low inflation rate; the value of the currency of the country with high inflation rate will continue to fall while the value of the currency of the country with low inflation rate will keep rising. The current inflation rate in Nigeria is 29.90% while the current inflation rate in the US is 3.4%. Therefore, the Nigerian naira would continuously decline against the USD until the Central Bank of Nigeria and the Finance Ministry employ appropriate monetary and fiscal policy tools to reduce the inflationary gap between the NGN and the USD.

Chichi, Lagos

We have to go back and correct the sources of the inefficiencies. The absence of adequate and efficient production, efficient allocation of resources through a free pricing system; that is what the naira value is reflecting and it is what the government should be addressing across board. We can address some rather quickly. We can address the most crucial sectors, like the oil and gas, transport, and power sectors.

Etuk, Lagos

On the long term measures needed to help the naira, the nation need to seriously start considering medium to long-term solutions, which would mean creating an environment i.e. improving electricity and infrastructure that encourages export diversification, especially for enterprises that are export-led in manufacturing, commodities, and agro-processing, among other industries. Service industries including health, education, and information technology must also be taken into consideration.

Banule, Lagos

President Tinubu should stop the corrupt maintenance of the refineries and sell them off immediately to competent foreign and local investors. The government should remove the obstacles to exports at the ports and undertake infrastructure development. Nigeria should stop borrowing for consumption. The $800 million World Bank loan earmarked for ‘palliatives’ is another national recklessness, another source of self-enrichment for a few. Such funding would be better channeled to Micro, Small and Medium Enterprises (MSMEs). The government should raise money by privatising the four public refineries, the Ajaokuta Steel Complex, and operations at the airports and seaports. President Tinubu should revive the Presidential Executive Orders on the ease of doing business and make them work. Rather than increase taxes, government should simplify the tax system, expand the net, and collect the tax backlog from defaulters. All the 36 states, the FCT and the 774 Local Governments must become separate economic units. States should revive cocoa, groundnut and palm oil production, rice, beans, cassava, and mining in their respective domains. Above all, the president should stop shooting from the hip — announcing policies without prior rigorous planning and preparation.