Business
Naira Exchange Rates Determined By Demand And Supply Of Forex-Cardoso
The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, says the value of the Naira is determined by the availability of foreign exchange.
Cardoso said this yesterday in Abuja while addressing the House of Representatives on Naira depreciation and the instability in the foreign exchange market.
According to him, the exchange rate is determined by the dynamics of supply and demand for a product or service similar to the pricing of cows or cars.
“The value of the dollar in Nigeria is determined by the balance of dollars entering the country and the demand for dollars among Nigerians.
“The exchange rate in Nigeria has increased due to the simultaneous occurrence of two factors: a decline in the supply of dollars coinciding with a surge in the demand for dollars,” he said.
The CBN Governor said that the growing number of Nigerian students studying abroad was also a major contributor to forex scarcity and depreciation of the Naira.
“In the 1980s and 1990s, the need for US dollars for their living expenses was minimal. However, recent data shows a significant change.
“According to UNESCO’s Institute of Statistics, the number of Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000 in 2015.
“By 2018, this figure, according to a World Bank report, had reached 96,702 students. Another report projects the number of Nigerian students studying abroad to exceed 100,000 by 2022.
“Additionally, the UK’s Higher Education Statistic Agency noted a 64 per cent increase in Nigerian students studying in the country, rising from 13,020 in the 2019/2020 academic session to 21,305 by the 2020/2021 session,” he said.
He said that between 2010 and 2020, foreign education expenses amounted to a substantial 28.65 billion dollars.
“Medical treatment abroad has also incurred around 11.01 billion dollars in costs during the same period.
“Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly 40 billion dollars.
“This amount surpasses the total current foreign exchange reserves of the CBN. Mitigating a significant portion of this demand could have resulted in a considerably stronger Naira today,” he said.
He said that Personal Travel Allowances have also accounted for a total of 58.7 billion dollars during the same period.
According to him, between January and September 2019, the CBN disbursed 9.01 billion dollars to Nigerians for personal foreign travel.
He said that Nigeria’s annual imports, which require dollars for payment, amounted to 16.65 billion dollars in 1980.
“By 2014, the annual import expenditure had significantly surged to 67.05 billion dollars, although it gradually decreased to 54.71 billion dollars as of 2023.
“Similarly, food imports escalated from 2.63 billion dollars in 1980 to 14.84 billion dollars in 2019,” he said.
Cardoso said that over the past 12 years, oil exports, constituting over 90 percent of our foreign exchange earnings, have declined from 93.89 billion dollars in 2011 to 31.4 billion dollars in 2020.
“The genuine issue impacting the exchange rate is the simultaneous decrease in the supply of, and increase in the demand for, dollars.
“It also seems that the task of stabilising the exchange rate, while an official mandate of the CBN, would necessitate efforts beyond the apex bank itself and indeed to an attitudinal change of all our citizens,” he said.
Cardoso assured that the management team of the CBN was dedicated to refocusing the apex bank by giving primacy to price stability.
He said that the team also aimed to build confidence in the Nigerian economy through the maintenance of stability in consumer prices and the foreign exchange market.
“We are aware that the twin challenges of inflation and exchange rate depreciation on our economy are daunting, however, they are not insurmountable.
“Monetary policy actions are sometimes inhibited by transmission lags, nonetheless, it is expected that the policy measures implemented by the CBN will permeate the economy in the short- to medium-term.
“Inflation pressures may persist, albeit temporarily, but are expected to moderate significantly by fourth quarter of 2024.
“Exchange rate pressures are also expected to reduce with the smooth functioning of the foreign exchange market.
“We are committed to implementing policies that will ensure a stable macroeconomic environment and guarantee improved livelihoods for all Nigerians,” he said.
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter
