Former Finance Minister Olusegun Aganga has offered insights into the ongoing depreciation of the Nigerian naira, attributing its continued weakening to the country’s heavy reliance on imports. Aganga emphasized that it is unwise to expend substantial resources defending the naira without concurrent investments in the manufacturing sector to boost the nation’s exports.
He shared his perspective during the 3rd Adeola Odutola lecture, which took place as part of the 51st Annual General Meeting of the Manufacturers Association of Nigeria. Aganga underscored the necessity for Nigeria to prioritize local production, especially for export, in order to bolster the strength of the naira.
Notably, the Nigerian currency has seen a significant decline, dropping from approximately 450 naira per US dollar to an average of 760 naira per dollar following President Bola Tinubu’s exchange rate reforms. It further weakened to 1045 naira per dollar in the parallel market on a recent Thursday.
Aganga questioned the wisdom of allocating substantial resources to defend the naira while it continues to depreciate. He advocated for investments in genuine manufacturers and exporters of high-value products, which could generate foreign income for Nigeria.
The former Minister called on the government to declare the industrial sector a national priority, accompanied by comprehensive plans, policies, and financial support. He highlighted the potential returns on investment in strategic industrial sectors, contrasting it with expenditures on subsidies, bailouts, the Agric Anchor Borrowers Programme, and refinery maintenance. Aganga expressed confidence that well-directed spending on these sectors could be recovered and provide significant benefits to the economy and the nation as a whole.[logo-slider]