The Federal Government has allocated approximately $8 billion in efforts to stabilize the naira amidst persistent economic challenges.
This information was disclosed by Bismarck Rewane, the CEO of Financial Derivatives Company.
During an appearance on Channels Television’s News, Rewane emphasized the significant measures taken to address exchange rate fluctuations and inflation issues.
His comments came in light of the recent Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN), which decided to maintain the Monetary Policy Rate (MPR) at 27.50% on Thursday.
He noted that the government has not only expended billions to defend the currency but has also secured additional financing through debt instruments. “We’ve also borrowed $4 billion in bond issues. When you take a look at that, you’ll see there is a lot of work. We’ve actually spent almost $8 billion trying to support the naira at current levels,” Rewane remarked.
Regarding the recent rebasing of Nigeria’s inflation data, Rewane pointed out that it has resulted in differing interpretations of the nation’s economic situation. He identified three distinct methods of measuring inflation, each yielding different results:
Old Method: Inflation is recorded at 34.8%
New Method (Rebased Data): Inflation decreases to 24.4%
Market Survey (Real Inflation): Inflation is approximately 33%
Expressing doubt about the significant drop indicated by the new inflation metric, he remarked that these figures may not accurately represent the experiences of ordinary Nigerians. “There’s no way that inflation can reduce by 10% in a short period. The man on the street does not believe that inflation has come down as sharply as that,” he stated.
Implications for Nigerians
The ongoing challenges facing the naira, combined with uncertainties surrounding inflation, raise questions about the efficacy of government strategies aimed at stabilizing the economy.
While official statistics suggest a moderation in inflation, the realities faced by consumers indicate otherwise, as they continue to contend with increasing living costs.