Nigeria's foreign exchange reserves might have continued to be under stress because they dropped by 8.3 percent from $37.1 billion in January 2023 to $33.9 billion in July 2023.
During his presentation to the National Economic Council (NEC), Laoye Jaiyeola, the director general of the Nigerian Economic Summit Group (NESG), made this disclosure.
He emphasized the need for macroeconomic objectives and low inflation to be the goals of strategy.
Reviewing the nation's present economic situation, Jaiyeola said that imports of refined petroleum products and imports of crude oil have dominated Nigeria's trade structure, while investment inflows and the country's investment/GDP ratio have decreased since 2019.
He continued by saying that the naira's situation versus the world's major trading currencies had gotten worse.
The pressure on FX demand, which widens the gap between official and parallel market rates because of insufficient supply and speculative tendencies, continues to drive market volatility despite recent FX alignment. External reserves are also under pressure as they declined by 8.3% from 37.1 billion in January 2023 to 33.9 billion in July 2023.
He emphasized the necessity for strong social programs while pointing out that the loss of fuel subsidies will result in higher inflation.
Jaiyeola also promoted government spending that was more efficient, pointing out that there has been confusion about how the government spends subsidy savings, which has to be rectified.
However, he pointed out that increasing investments in the downstream and midstream sectors of the petroleum industry would lessen the industry's heavy reliance on imported gasoline and eliminate the need for fuel subsidies.
In order to increase national competitiveness, the NESG boss advised NEC to persist on pursuing a national legislative reform agenda.
The NESG through NASSBER, our partnership with the National Assembly, and the Nigerian Bar Association has identified over 115 laws that restrict growth; in the last few years, 10 laws have been passed (including the Companies and Allied Matters Act (CAMA) 2020 and the Petroleum Industry Act (PIA) 2021), he said. "It is crucial that Nigeria resolves the legislative binding constraints to our national competitiveness.