Nigeria's FX crisis: Will short-term fixes suffice?

Nigeria is currently facing a challenging time in its foreign exchange market as the value of the Naira continues to decline. The Governor of the Central Bank of Nigeria, Olayemi Cardoso, has indicated that the apex bank's management team is committed to addressing the liquidity issues in the foreign exchange market. However, with weak supply and dwindling reserves, the central bank is finding it difficult to support the local currency effectively. Johnson Chukwu, CEO of Cowry Asset Management, joined CNBC Africa to discuss the FX crisis and the government's efforts to boost revenue generation. Chukwu highlighted the need for a coordinated approach between monetary and fiscal policies to address the structural deficiencies in the economy. He emphasized the importance of tackling insecurity, increasing foreign currency earnings, and creating a conducive environment for investors to attract foreign investments. Chukwu also expressed concerns about the backlog of unremitted funds for investors and the challenges of clearing these areas. In terms of revenue generation, the focus on wealthy Nigerians and tax compliance was discussed, with Chukwu advocating for an expansion of the tax net rather than burdening existing taxpayers. Overall, the challenges ahead for Nigeria require a comprehensive strategy that goes beyond monetary policy tools and involves a holistic approach to address the country's economic issues.