The Governor of the Central Bank, Yemi Cardoso, stated that the sharp drop in the value of the naira presents an opportunity for the country to boost its exports to other nations.
Cardoso said this at the Nigerian Economic Summit on Wednesday in Abuja.
The CBN Governor noted that the naira’s devaluation has made it more competitive for export trade, with many investors already seizing the opportunity.
Cardoso acknowledged that while the situation is not ideal, the current climate offers a chance for individuals to identify and pursue investment opportunities.
“In terms of persuasion, what we need now is to ensure that investments are here. Take, for example, now it may seem like a threat in the sense that the exchange rate has come down so low. But that also is an opportunity because what that means is that it can help to boost your exports.
“This will make Nigeria to become a lot more competitive in the export trade. I just want to encourage people to say that the opportunities are here. Things are recalibrating in a particular direction. It’s not perfect, but definitely there opportunities for people to single out and invest.
“By the time you are exporting out to other countries with the cost of import here and the relatively low naira, you will have a situation where the demands of your goods are much more. And I see it happening. Others are doing it and the interest is growing in leaps and bounds,” Cardoso said.
Central Bank Policies on the Right Track
In addition, Cardoso reiterated the position of the World Bank, stating that the policies of the CBN are on the right track.
He further disclosed that not only the World Bank but other financial institutions as well as rating agencies have commended the apex bank’s effort in transforming the economy.
Cardoso therefore stated that the bank needs to stay on course to fully reap the benefits of the policies set in motion.
“The issue of the World Bank Chief Economist. I wasn’t here. But I read the speech. To be honest, my interpretation wasn’t how others perceived it. I think he was basically misunderstood.
“My understanding of what he said is that the policies that the policies that the Central Bank is taking are putting Nigeria on the right track.
“Frankly, I did not mention the World Bank when I said earlier that if you look at the rating agencies and other international financial institutions, it’s all the same thing. And they are all saying the same thing. And I doubt that they might all be wrong,” Cardoso added.
What you should know
As the value of the naira depreciated by over 170% in the past year, trading between 1,685/$ and 1,700/$ in the foreign exchange market, Nigeria has recorded a significant trade surplus, reaching N6.95 trillion in the second quarter of 2024.
- This trade surplus is primarily driven by the weakened naira and a steep decline in imports, as the rising cost of importing goods and services has made foreign products increasingly expensive.
- Many believe the weak naira presents an opportunity to boost the export of Nigerian goods, providing the country with more foreign exchange to help stabilize the currency.
- The CBN governor emphasized that a depreciated naira enhances export competitiveness, giving Nigerian exporters a substantial advantage in international trade.
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