Nigeria lacks sufficient reserves to tackle FX demands, backlog in the market, says expert

An economist, Mr. Esili Eigbe, has said Nigeria lacked sufficient reserves to tackle the demands for foreign exchange and the backlog in the forex market.

Eigbe, who disclosed this in an interview with Arise TV on Thursday, monitored by Persecondnews, urged President Bola Tinubu to take a look at serious physical consolidations.

Shedding light on the ongoing challenges faced by the nation in managing its currency and economic stability, he noted that despite the government’s commitment to implementing reforms aimed at resolving the FX issues, there appears to be a contradiction in their actions.

He said: “I think it is very early, and I think we don’t have sufficient reserves to tackle the demands or backlog of FX in the market.

“A lot of reforms have taken place on the monetary side; in my opinion, I guess the first step is addressing the issue and potential inflation.

“So, I think there is no silver bullet. It is going to take time—perhaps years—to manage the currency situation and inflation. If you are looking for examples of countries where you have seen similar situations and how they have handled them, we will look at places like Argentina, Venezuela, and so on.

“One lesson that Nigeria needs to learn from these countries is that you need to move very quickly to be ahead of the problem.”

“I will suggest, in the context of President Tinubu’s discussion on Wednesday, that I think it is important that Nigeria really begins to look at serious physical consolidations.

“There have been reforms, but the body language of the government, in my opinion, speaks otherwise,” Persecondnews quotes him as saying.

Eigbe, who is also the Director of Escap Management, called on the President to develop a plan to salvage the situation of the economy and put it on a path of freedom in the coming years.

“It will be a fair assumption to expect more suffering in the next couple of months; it could even be two years. Like I said, there is no silver bullet, and we are going to have to take the pain for possibly two to three years.

“We need to put together a plan, a development plan for this country, which I haven’t seen yet.

“If I were the president, this is an opportunity for me to just clean the slate, put Nigeria on a path, and put forward a development plan that would get Nigeria to where it needs to be, perhaps 30 years from now.

“He doesn’t need to be the one who completes the job, but at least the guy who starts that process,” he said.