The Central Bank of Nigeria needs to close the gap between the official and black market exchange rates for the naira against the United States dollar “very soon”, Vice-President Yemi Osinbajo has said.
The VP told reporters at the World Economic Forum in Davos, Switzerland on Tuesday that as part of the country’s economic recovery and growth plan, the Federal Government was talking to the CBN on the need to ‘’unify’’ the two exchange rates, Reutersreported.
“The gap between the official and parallel market… it isn’t helpful,” Osinbajo said.
The naira’s official rate, which is controlled by the CBN, has been hovering around 305 against the dollar since it was devalued in June.
The official rate is still 40 per cent stronger than the parallel market rate, and the gap is discouraging investment from overseas.
The situation has left the country starved of foreign currency.
The official and black market rates will be “unified” this year, but there is no time frame, when it can happen, according to Osinbajo.
Financial institutions, among others, have argued that the CBN must allow the naira to float freely to solve the country’s foreign exchange woes, a measure which has met opposition from President Muhammadu Buhari.
The country’s lack of dollars has been exacerbated by a crunch in crude oil production, caused by militant attacks on facilities in the Niger Delta region, and low global prices for oil, on which the Federal Government depends for 90 per cent of its forex earnings.
“The current output is 1.7-1.8 million barrels per day and it could improve as soon as we sort out things in the Delta,” Osinbajo said.
In an effort to end militant attacks and remain “actively engaged”, Osinbajo said he travelled to the Niger Delta for talks with militants earlier this week.
The VP also said the Federal Government was planning to sell Eurobonds worth $1bn in March, instead of March. This will help to refill the government’s coffers.
