Minister of Finance and Coordinating Minister for the Economy, Wale Edun, said yesterday in the United States (U.S.) that strategic steps are being taken by the Federal Government to de-dollarise the economy and boost the naira value.
He spoke during the investors parley held on the sidelines of the ongoing World Bank/International Monetary Fund Annual Meetings in Washington DC.
As a partially-dollarised economy, Nigeria operates with dollar bias for international trade, finance invoicing and of recent, store of value.
Under high and persistent inflation, market participants defend themselves by shifting to the dollar.
The most common type of dollarisation is financial dollarisation (FD), or asset substitution, caused by a poor performance and falling value of the local currency.
The local currency is used more for payment transactions but is replaced by the dollar as a saving asset or store of value.
Speaking on the theme: “A new Nigeria: An era of bold reforms”, Edun said that the government has asked manufacturers and businesses to invoice in naira, instead of dollar, thereby reducing demand for dollars in the domestic market.
At the investors’ parley were Standard Chartered Bank, Goldman Sachs, JP Morgan, and strategic investors in the economy.
Also present at the event are Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, Director-General, Debt Management Office, Patience Oniha, Director-General of the Budget Office of the Federation, Tanimu Yakubu; Permanent Secretary, Federal Ministry of Finance, Mrs. Lydia Jafıya among others.
Edun said the government is also taking steps to ensure that more dollars flow into the economy, to stabilize and protect the naira.
The minister said: “We are asking people to invoice in naira, rather than dollar, thereby reducing the demand for dollars. We have moved to free market pricing in petrol, jet fuel, kerosene, and that is the first time in 40 years that we are doing that.”
According to him, an increase in oil production means more dollar inflows into the economy.
He also spoke of the effort by security operatives to ensure sustained rise in oil production, adding that the financial markets and bond markets remain open to Nigerians in Diaspora to invest dollars to the economy.
