The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has stated that the recent sharp decline in the value of the naira presents a significant opportunity for Nigeria to enhance its export trade. He made this assertion during the Nigerian Economic Summit on Wednesday in Abuja.
Cardoso noted that the naira’s devaluation has increased its competitiveness in the export market, prompting many investors to capitalize on this shift. He acknowledged that while the current situation is far from ideal, it allows individuals and businesses to identify and pursue investment opportunities.
“In terms of persuasion, we need to ensure that investments are here. Although the exchange rate has dropped significantly, this also presents an opportunity because it can help boost your exports,” he stated. Cardoso emphasized that this situation makes Nigeria more competitive in export trade.
He encouraged stakeholders to recognize the emerging opportunities, saying, “Things are recalibrating in a particular direction. It’s not perfect, but there are opportunities for people to single out and invest. By exporting goods to other countries, given the high costs of imports and the relatively low naira, demand for Nigerian goods is expected to increase significantly. I see it happening, and interest is growing exponentially.”
Central Bank Policies on the Right Track
In addition, Cardoso reiterated the World Bank’s support for the policies implemented by the CBN, stating that these policies are steering Nigeria in the right direction. He also highlighted that other financial institutions and rating agencies have commended the apex bank’s efforts in transforming the economy, urging the bank to fully stay on course to realize the benefits of these policies.
“My interpretation of the World Bank Chief Economist’s recent remarks is that they were misunderstood. He essentially affirmed that the CBN’s policies position Nigeria favourably,” Cardoso explained. He expressed confidence that the assessments from various financial entities align and are unlikely to be incorrect.
What You Should Know
The naira has depreciated by over 170% in the past year, trading between 1,685/$ and 1,700/$ in the foreign exchange market. As a result, Nigeria has recorded a notable trade surplus, reaching N6.95 trillion in the second quarter of 2024. This surplus has been driven largely by the weakened naira and a significant decline in imports, as rising import costs have made foreign goods more expensive.
Many experts believe that a weak naira provides an opportunity to increase the export of Nigerian products, thereby generating more foreign exchange to stabilize the currency. Cardoso emphasized that the depreciated naira enhances export competitiveness, granting Nigerian exporters a substantial advantage in international trade.
