The N423/$ Message from Nigeria’s Bankers Committee

The Naira will not come down to N423/$ since what makes the Naira go up is not fully under the control of banks and the CBN HQ. The warehouses and factories (modern and old types) need to wake you, boosting exports to help Naira. Without them running, Naira will continue to underperform despite any financial engineering in CBN.  Yet, recent policy by CBN will help the Naira to stabilize despite any short-term spike.

The Bankers Committee of Bank Chief Executive Officers, headed by the Chief Executive Officer of Access Bank, Herbert Wigwe, has assured Nigerians that the exchange rate will drop to around N423 to a dollar. The Committee of Bank CEOs addressed the media on Thursday following the halt in the sales of forex to Bureau De Change operators by the directive of the Central Bank of Nigeria (CBN).

Addressing the question on the sharp spike which saw the dollar hit N523, the Chief Executive Officer of Guarantee Holding (GTCo), Segun Agbaje said: “What we saw in the market yesterday and today is an aberration. “The rate will come down. Very soon, you will buy at N423 or N425 at most.”

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Comment #1: The stability of the Naira is neither determined by the beauty of banking hall nor the opulence of the office of the CEO nor by their speeches, but by the wheels of manufactured products engineered for exports to earn $$$.

In fact prior to July 2004, Bank Executives were among the least trusted because Banks ‘dey fold like paper’. It took the radical 13-Point agenda of Prof. Charles Soludo as CBN Governor that forced Bank’s to raise their capitalization from $15 Million to $200 Million in 2004, it is this decision that changed the image of Nigerian Banks and their growth path.

Having watched a video recently about the Nigerian FOREX business and the Registration process with CBN, it is very clear that what is happening in that space is synonymous to the Nigerian Fuel Subsidy Scam where Companies are just registered with CAC and the Owners of the Company only owns briefcase ? and that’s it, you start trading. Yes, 5000 people are applying monthly to become BDC Operators, and you can operate it virtually from any corner of the world.

CBN just cut ?? off the pipeline and now handed it over to a “very few”. For as long as companies and individuals are not exporting goods and services to earn in $$$, nothing much will happen.

Comment #2 : No, naira can come down to N423 if we want, the same way it accelerated above N500 with no economic fundamentals, it was all staged.

That argument of demand and supply is very weak in naira management, because no evidence has shown that inflating the exchange rate improves supply, so all we do is to increase poverty without actually taming the quest for more dollars, it doesn’t make sense.

If our dollar inflow is $500 million per week, it cannot magically become $800 just because we exchanged naira for N500, we simply overvalued dollar, not minding that dollar has been losing value as well.

Yes, we have limited dollar supply, so let’s deploy it on things that are critical to our continuous existence, many of the things we waste dollars on will find their level locally, once the dollars dry up. People have been profiting from selling panic and fear, let’s face the demons this time and swim and sink, Nigerian spirit is stronger than this artificial dollar scarcity shenanigan.

The factories and warehouses will rise, nobody thought majority of Nigerians would embrace consumption of local rice, same happened with local juices; if people see opportunities opening up in these sectors, we will put this dollar mystery behind us.

I still have clarity on how we can make local shoe brands talk of the town in Nigeria, it’s not rocket science, and our people will love it.

I am with bankers committee on this one.

By Q4 2022, Central Bank of Nigeria will Exchange Dollars Directly with Nigerians and Companies via e-Naira Digital Currency

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