Rewane, Bank raise hopes on economy
A positive outlook on volatile crude oil prices, foreign exchange management and Nigeria’s trade figures has raised new hopes for the ailing economy.
Specifically, Nigeria’s balance of trade is projected to record an improvement from negative $0.5 billion to $3.8 billion before the end of 2018.
The Chief Executive Officer of the Financial Derivatives Company Limited, Bismarck Rewane, who made the observation at Access Bank’s foreign exchange sensitisation seminar in Lagos, noted that with oil price averaging $52 per barrel and production at 1.8 million barrels per day, revenue will be enough to meet trade finance obligations.
Rewane noted that Nigeria’s terms of trade, which in 2017 is at 15.9, was a significant decline when compared with 18.9 record in 2015, but added that there would be need for foreign exchange policy rebalancing.
“The oil companies are still compelled to sell their foreign exchange to the CBN. The current naira appreciation is as a result of four factors- mainly a sharp increase in our oil revenue estimated at a monthly value of $2.5 billion; a policy shift towards a discriminating crawling peg, effectively depreciating invisibles from N305/$ to N360/$; a 16.9 per cent increase in the quantity supplied over first quarter 2016 to $6 billion; and the opening of a new investor/exporters window as a proxy for price discovery,” he said.
However, the economist noted that at current level of revenue, Nigeria will struggle to meet capital and infrastructure funding obligations.
But the Chief Executive Officer of Access Bank Plc, Herbert Wigwe, had earlier said that recent developments in the foreign exchange market and the attendant impact on the market and businesses at large were the reasons for convening the forum.
“I will like to thank the Governor of the Central Bank of Nigeria, Godwin Emefiele, and his team for the bold and laudable policy directives in recent times to jump start the economy and boost liquidity in the foreign exchange market.
“This, not only provides hope for businesses in the country, that were initially incapacitated by the constrained liquidity of the foreign exchange market, but also shows clearly the road map to bringing the economy back as an investment hub of the financial world.
“As a bank, our commitment to the development of the Nigerian financial market is unflinching and deeply rooted in our desire to see a liquid, structured, sustainable and well developed market that is global in its reach and conducive for businesses both great and small,” he said.