The Nigerian Federal Government has acknowledged a shortage of foreign exchange, attributing it to the country's limited earnings from exports. Speaking at a conference in Abuja, Finance Minister Wale Edun highlighted the imperative for Nigeria to diversify its revenue streams beyond relying heavily on crude oil. Data from FMDQ Securities, the official naira trading platform, reveals that on November 16, 2023, the naira concluded trading at N841.14/$1, indicating a 2.71% loss compared to the previous day's exchange rate of N818.99/$1.
The parallel market, or black market, recorded the naira closing at N1,120 to a dollar on November 17. Edun, linking the forex shortage to low export earnings, expressed concern despite the ongoing economic diversification. He stressed that while various sectors like telecommunications, transport, and manufacturing contribute to the economy, there remains insufficient foreign exchange earnings and savings to achieve a positive trade balance.
Edun emphasized the need for the country to earn more from exporting goods than it spends on imports, creating foreign reserves to stabilize the currency. Referring to the naira's record low in September 2023, the minister, during an interview in the US, attributed it to $6.8 billion overdue forward payments on the forex market.
Addressing the reluctance of foreign investors due to inflation in Western countries, Edun suggested that the government might seek solutions and investments from companies instead. He underscored the government's commitment to ensuring economic stability, with the goal of attracting global investments by shaping the economy, institutions, and corporate governance in an appealing manner for potential investors worldwide.
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