N1,400/$1 Exchange Rate May Drive Inflation Higher—Alaje

**Lists Ways to Guarantee Stable Naira

By Aduragbemi Omiyale

The Nigerian government has been advised on the steps to take to achieve a stable Naira in the currency market amid the scarcity of foreign exchange (FX) in the country.

Since President Bola Tinubu assumed office on May 29, 2023, he has been racking his head on how to ensure a sufficient supply of forex into the market without success.

He has had to travel across the globe to woo investors in a bid to strengthen the local currency, which is gasping for breath because of a decline in FX earnings from crude oil sales, the country’s main source of forex revenue.

On Thursday, the Naira weakened in the official market to N900/$1 and N1,400/$1 in the parallel market as the demand for forex surged.

Reacting to the poor performance of the domestic currency yesterday, an economist, Mr Paul Alaje, said the country must take urgent steps to save the Naira from further depreciating.

He said things may get worse except some of the suggestions he gave are worked on to guarantee a stable Naira, as the N1,400/$1 exchange rate “is not for anyone’s good,” warning that “this may drive inflation higher and affect the real GDP.”

Mr Alaje advised the government to “ensure confidence and faith in the currency and the economy of Nigeria, and change the dominant economic activity from service to manufacturing, agro-allied, and plantation.”

He further urged the government to “promote export (especially Export Promotion and Import Substitution)” and ensure the monetary authorities promote discipline within the FX market.”

Mr Alaje emphasised that there must be a “convergence of policy by the monetary, fiscal, and trade authorities,” noting that “these should be the direction” because “using a quick fix or interventionist approach has not been sufficient for us.”