Nigerian President Muhammadu Buhari tried to reassure investors that he has the country’s currency and oil-rich Niger River delta region under control one year after taking office.
“We shall keep a close look on how the recent measures affect the naira and the economy,” Buhari said Sunday in a television broadcast to mark the first anniversary. “But we cannot get away from the fact that a strong currency is predicated on a strong economy.”
Buhari, 73, said he supported the central bank’s decision to align monetary policy with fiscal policy, referring to the move Tuesday to allow “greater flexibility” in the foreign-exchange market.
Buhari had resisted calls to let the currency weaken since coming to power in May last year, likening it to “murder.” He has now changed his stance, backing Central Bank Governor Godwin Emefiele’s move.
Emefiele signaled the Abuja-based bank may abandon a currency peg it’s held for 15 months that’s starved Africa’s biggest economy of dollars and slowed foreign investment to a trickle.
“Nigeria has been compelled to make a currency adjustment because of market forces and the deteriorating state of the economy,” Bismarck Rewane, chief executive officer of Lagos-based consultancy Financial Derivatives Co., said by telephone on Sunday. “The anti-devaluation lobby has succumbed to the reality of the day.”
The West African nation will fast-track repairs of its four state-owned refineries and seek to grow more rice, wheat and produce more sugar locally as part of plans to “save billions of dollars in foreign exchange and drastically reduce our food import bill,” Buhari said.
Africa’s largest economy shrank for the first time since 2004 in the first quarter as the government contends with lower global crude prices and production losses caused by violence in the oil-rich delta region. Emefiele said the nation, which derives two-thirds of state revenue from oil, is now heading into “imminent” recession.
Buhari aims to curb attacks in the Delta region through steps including a revamped amnesty program for ex-fighters and talks with leaders in the region.
“The recent spate of attacks by militants disrupting oil and power installations will not distract us from engaging leaders in the region in addressing Niger delta problems,” Buhari said.