Fx stability: FG hopeful of naira rebound, targets N650/$ exchange rate by December
…Crackdown on illegal FX traders pathway to naira stability — Oyedele
The Federal Government has expressed hope of the naira making a rebound and gaining fair stability before the end of 2023.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele disclosed this while speaking in an interview with foreign media outlet Bloomberg revealed that the Federal Government is targeting an exchange rate of N650 to the dollar by December this year.
The naira had early last week hit a record low of N1,310 per dollar following strong demand on the parallel market, also known as the black market. This is even as the BDC rate appreciated by 0.85% to N1,170/US on Tuesday.
Oyedele said the government aims to ensure the true value of the naira is reflected by December.
Speaking further, he added that the government will be introducing new foreign exchange rules (already part of the recommendations his committee made to President Bola Ahmed Tinubu), including a crackdown on illegal currency trading, to help the naira reach a “fair price” of N650-750 to the dollar by year-end.
Oyedele revealed that the government plans to clear a backlog of dollar demand, bolster the naira forward market, and set transparent rules for the official market.
He added that the government also wants to expand the official market to include all legitimate transactions while snuffing out the illicit “black market” for foreign currency.
Oyedele, during a presentation on “Building Resilience Through Domestic Revenue Mobilization” at the inaugural session of the annual African Tax Administration Forum (ATAF) meeting in Cape Town, South Africa, on Tuesday, called on other African countries to adopt a robust tax system that can adapt to the constantly evolving global economic landscape.
He stressed the importance of designing an efficient tax system that offers stability and adaptability to help nations navigate uncertain times.
Oyedele outlined key approaches to building a tax system that can withstand challenges.
He underscored the necessity of modernisation and the utilization of technology to improve tax collection and administration.
He emphasised the importance of aligning tax policies with the ever-changing global economic landscape.
According to Oyedele, “A resilient tax system should possess flexibility and agility to respond to changing circumstances and global shifts. It should be grounded in principles of transparency, fairness, and efficiency.”
He also advocated for international collaboration and the sharing of information to address tax-related issues in an increasingly interconnected world.
Oyedele concluded by reiterating that a resilient tax system isn’t just a means of revenue collection but is a fundamental pillar for a nation’s economic resilience and sustainable growth.
Meanwhile, the Central Bank of Nigeria on Tuesday has dismissed claims that it plans to redenominate the country’s currency – Naira – with effect from January 2024.
This was disclosed in a statement by the CBN’s Director of Corporate Communications, Isa AbdulMumin, amid claims suggesting the apex bank plans to redenominate the country’s legal tender.
“We are concerned that this narrative, which we had refuted before now, appears to be gaining traction with several debates on the implication of such a policy for the Nigerian economy,” the statement read.
“We wish to reiterate that the contents of the message are misleading. The authors of the message, in their mischief, modified text eked from an old policy move by a previous CBN Governor in 2007 to make it appear recent.
“For the avoidance of doubt, there is currently no plan by the Bank to restructure and redenominate the naira. The public is hereby advised to ignore the news report, as it is speculative and calculated to cause panic in the polity.”
While the bank may be considering reforms, AbdulMumin said “such are subject to laid down procedures in line with the provisions of the CBN Act, 2007.”
