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Naira Reverses Course Temporarily (Now N707/$)

The naira surprised speculators and market watchers by appreciating by 1.5% from N718/$ to N707/$ on Friday. Most analysts were fearing that a N1000/$ was within shouting distance. As unpalatable as N707/$ may sound, some Nigerians are breathing a sigh of relief. The reason for this respite is mainly because of a naira crunch. The fundamental economic reasoning is that for every dollar bought, there is a naira paid. Therefore, Mr. Jimoh who wants to buy $10 million will need to cough up N7.2billion. Once Jimoh pays this and collects the dollars, he immediately has a hole of N7.2billion to cover. He is now out of the market for an extended period. Replicate this in a hundred different places and you can see why there is temporary resistance at N718/$ and a market correction which means the naira may appreciate to N695/$ before falling again. These are technical movements which do not address the fundamental weaknesses in the Nigerian forex market and the short supply of dollars from the CBN and exporters. The essence of this discussion is that there is a limit to how much naira is available in the system.

However, Agusto & Co Ltd in their report, recommends that Nigeria adopts a crawling peg exchange rate mechanism as a way out of the current currency crisis in addition to other inflation curbing measures.

IMF Slashes Global Economic Outlook Again, Retains Nigeria’s Growth Prospect

International Monetary Fund (IMF), in a more pessimistic move, downgraded the 2022 global growth forecast for the second time this year to 3.2% from estimated 6.1% growth in 2021. However, the Fund retained Nigeria’s 2022 growth outlook at 3.4% amid worsening macroeconomic imbalances.

Waste to Wealth – Higher Yield Per Hectare and Higher Storage

Nigeria, with a huge capacity for tomato production and export, is currently experiencing low tomato production due to low yield and high level of post-harvest losses. With a total farmland area of 844,445 hectares (ha) for tomato cultivation, Nigeria’s tomato production was estimated at 3.69 million tonnes, amounting to a yield of 43,741 hectogram per hectare (hg/ha).

In this edition of the FDC Bi-Monthly publication, FDC Think-Tank analyzes the public policy options for converting brain drain to brain gain and optimizing the tomato value chain. The publication also explores the new challenges facing central banks, the global economic outlook and other major economic events in Nigeria.

Enjoy your read!