Nigeria’s President-Elect, Asiwaju Bola Ahmed Tinubu has spoken in favour of foreign exchange reforms in the country
The decision is in line with the recommendation by World Bank for a single foreign exchange market
The WB also urged Nigeria to do away with its multiple Forex markets
As a result, Tinubu said he would work with the Central Bank of Nigeria to whittle down the 3xchange rate to about N200 to a dollar during his first term in office.
In its latest ‘Macro Poverty Outlook for Nigeria: April 2023’, the World Bank said unification of the forex markets should be one of the reforms to strengthen the recovery of the country’s economy.
According to the global financial institution, the foreign exchange reform will restore macroeconomic stability which the bank said has weakened due to exchange rate distortions.
Although, the World Bank also cited declining oil production, costly fuel subsidies, and monetization of the fiscal deficit as reasons for weak macroeconomics.
“Macroeconomic stability has weakened amidst declining oil production, costly fuel subsidies, exchange rate distortions, and monetization of the fiscal deficit.
The authorities can strengthen the economy by restoring macroeconomic stability through reforms to increase oil and non-oil revenues, tighten monetary policies to reduce inflation and unify the multiple FX windows and adopt a single, market-responsive exchange rate,” the report said.