After the Central Bank of Nigeria floated its currency, the naira, the value of Nigeria's exports became projected to increase to at least N41.99 trillion annually.
To close the gap between the official and black market values of the naira, the central bank had last Wednesday instructed deposit money banks to eliminate the rate cap on the naira at the official Investors and Exporters' Window of the foreign currency market.
A statement by the Central Bank reads in part, “The Central Bank of Nigeria wishes to inform all authorized dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange Market: Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters window.”
Following the change, the naira dropped from 471/$1 to 664.04/$1 before closing a week later at N663.04/$1. Exporters, notably the Federal Government, would earn more money (in naira terms) from exports' dollar earnings as a result of the naira's depreciation versus the dollar.
Nigeria's overall exports in 2022 were estimated by the International Trade Center to be $63.34 billion. Its equivalent in naira was N28.41 trillion at N448.55/dollar (the central exchange rate for the dollar as of December 30, 2022, according to the Central Bank's website). However, at Friday's exchange rate of N663.04 to the dollar, its equivalent in Nigerian naira would be N41.99 trillion.
Nigeria would earn around N41.99 trillion if it exports the same amount as it did in 2022. Additionally, Nigeria's export value is anticipated to rise as a result of the government's aim to expand oil production, which is a significant part of the nation's export.
Data from the multilateral organization, which gets its information from the National Bureau of Statistics and the United Nations COMTRADE, and which shares a mandate with the World Trade Organization and the United Nations, revealed that Nigeria made N25.78 trillion ($57.47 billion) from its largest exported commodity, oil, and mineral fuel. This was true notwithstanding a decline in oil output brought on by the theft of crude oil and pipeline damage.
The CBN's action followed a request for the uniformity of currency rates made by President Bola Tinubu in his inaugural speech on May 29. “The central bank must work towards a unified exchange rate. They should direct the fund from arbitrage to meaningful investment,” the president had said.
This move by the Central Bank of Nigeria is expected to increase the government's income, which has been steadily declining.