- Renowned economist Bismark Rewane has stated that the Nigerian currency, the naira, is undervalued
- He echoed the sentiments of several other financial experts, including the CBN, the minister of finance
- The assessment of the naira’s value comes as the dollar exchange rate continues to decline in the black market
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Bismarck Rewane, chief executive officer of Financial Derivatives Company, has restated that the naira current exchange rate is undervalued by 27.81%.
Rewane also said that he expects the naira at N1,550/$, while the black market rate is expected to close at N1,600/$ in the parallel market by Q1 2025.
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He expressed these views in his February 2024 presentation at the Lagos Business School (LBS) Breakfast Session.
The renowned economist also spoke on the importance of forex inflows from different sources, such as the creative industry, to stabilise the naira.
According to Rewane, income realised from the creative space could help reduce the pressure on the naira.
"Nigerian musicians, actors, and actresses are in high demand globally, but proper financial management is crucial to prevent bankruptcy, as seen in cases like Mike Tyson and Toni Braxton, especially since an artist's shelf life in the creative industry is often ephemeral."
Other comments on the naira's value
Rewane is not the only one who believes that the naira is undervalued.
Yemi Cardoso, governor of the Central Bank of Nigeria (CBN), recently stated that the naira was undervalued.
Speaking at the NESG 2024 conference, he said:
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"We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term."
Similarly, in October 2023, Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, said the government would see a “fair price” for the dollar at “N650 to N750.”
In August, during his ministerial screening, Wale Edun, now the finance minister and coordinating minister of the economy, stated that the naira’s fair value was 700/$1.
Renaissance Capital Africa, in its recent research report, also stated that the Nigerian naira is still largely undervalued compared to its long-term average by approximately 30%, Punch reports.
Current naira exchange rate
Meanwhile, the naira in the Nigerian Autonomous Foreign Exchange Market (NAFEM), which is the official market, was sold at an exchange rate of N1,509/$1 on Wednesday, February 19.
However, in the black market, traders told Legit.ng that the naira depreciated further against the dollar on Wednesday.
Abdullahi, a Bureau De Change (BDC) trader, said:
"On Wednesday, we sold the dollar at N1,520, while we lowered the buying rate to N1,502."
Experts tell FG how to help naira against US dollar
Legit.ng reported that Ayo Teriba, CEO of a Lagos-based research firm, stated that the naira's current exchange rate of N1,500 is not a cause for celebration.
According to him, the FX rate declined to as low as N1,900 and later improved to N1,300 per dollar, making it the best performance that year.
He said the government should seek to bring the exchange rate to N1,000.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
