CBN to make forex available for activities boosting the economy

The Central Bank of Nigeria, in a bid to stimulate economic growth and generate employment opportunities, has announced plans to make forex available for activities that would boost the economy. Chamberlain Peterside, CEO of Xcellon Capital Advisors, discussed the implications of this decision and other key market headlines during an interview on CNBC Africa. The conversation highlighted the importance of proactive engagement with the private sector, the need for swift policy implementation, and the challenges facing the power sector in Nigeria. As Nigeria navigates the delicate balance between public health and economic stability during the COVID-19 pandemic, various sectors of the economy have been impacted differently. Lagos, the commercial hub of the country, has started to ease restrictions gradually, while other regions are still experiencing limitations on economic activities. The gradual reopening of sectors aims to prevent severe damage to the economy caused by prolonged lockdowns, recognizing the dual challenge of safeguarding public health and sustaining economic vitality. Peterside emphasized the significance of continuous dialogue between fiscal and financial authorities and the private sector. While engaging with conglomerates is a positive step, he stressed the need for prompt policy actions to translate these engagements into tangible outcomes. The announcement of a billion-dollar SME fund and a one trillion Naira COVID relief fund underscores the government's commitment to supporting various sectors. However, the effectiveness of these initiatives will depend on the speed of fund disbursement and accessibility for businesses in need. Moreover, the recent news of the appointment of a new director-general for the Securities and Exchange Commission (SEC) raised questions about timing amidst the ongoing crisis. Peterside highlighted the importance of maintaining governance continuity and ensuring that key positions are filled promptly to avoid disruptions in crucial economic decision-making processes. He emphasized the necessity of ongoing government operations to prevent adverse impacts on the economy and overall governance. Addressing the long-standing challenges in the power sector, particularly the issue of privatization and tariff adjustments, Peterside acknowledged the complexity of the sector's value chain. While advocating for targeted solutions to specific problems, he cautioned against blanket policy cancellations that could erode investor confidence. Despite the hurdles faced by the power sector, he called for a strategic approach to address the underlying issues and enhance operational efficiency. Looking ahead to the next meeting of the Nigerian Monetary Policy Committee (MPC), Peterside noted the ongoing debate regarding monetary policy easing. While some argue for a more accommodative stance to stimulate economic growth, the Central Bank has maintained a cautious approach to managing money supply and inflation. The decision to prioritize funding for productive sectors reflects the central bank's commitment to balancing economic stability and inflation control. In conclusion, the conversation with Chamberlain Peterside shed light on the critical strategies needed to navigate Nigeria's economic landscape amid the challenges posed by the pandemic. The central bank's initiative to make forex available for economic activities signals a proactive response to support businesses and drive economic recovery. As stakeholders await further policy actions and funding disbursements, the focus remains on fostering collaboration between public institutions and the private sector to build a resilient and sustainable economy.