Nigerian President Muhammadu Buhari tried to reassure investors that he has the country’s currency and oil-rich Niger River delta region in hand one year after taking office.
“We shall keep a close look on how the recent measures affect the naira and the economy,” Buhari, 73, said Sunday in a television broadcast to mark the first anniversary. “But we cannot get away from the fact that a strong currency is predicated on a strong economy.”
His comments came four days after central bank Governor Godwin Emefiele said the economy will probably slip into a recession and announced plans to introduce more flexibility in the foreign-exchange market. The latest remarks by Buhari, who once likened a move to weaken the currency to “murder,” suggested to some analysts that he may be changing tack.
“Nigeria has been compelled to make a currency adjustment because of market forces and the deteriorating state of the economy,” Bismarck Rewane, chief executive officer of Lagos-based consultancy Financial Derivatives Co., said by phone on Sunday. “The anti-devaluation lobby has succumbed to the reality of the day.”
Falling prices and production of crude, from which Nigeria derives as much as 70 percent of state revenue, have caused the nation’s economic outlook to deteriorate as the government struggles to pay salaries and stimulate growth, forcing it to increase borrowing. Nigeria’s gross domestic product fell by about 0.4 percent in the three months through March from a year earlier — the first quarterly contraction since 2004 — as oil output slumped amid militant attacks on pipelines and as the central bank’s FX restrictions led to shortages of imported goods, including fuel.
Buhari in his address said Nigeria needs a strong economy, and “a strong economy pre-supposes an industrial productive base and a steady export market.”
“The measures we must take, may lead to hardships,” he said.
The West African nation will fast-track repairs of its four state-owned refineries and seek to grow more rice, wheat and produce more sugar locally as part of plans to “save billions of dollars in foreign exchange and drastically reduce our food import bill,” Buhari said.
Buhari also said he aims to curb attacks in the delta region through steps including a revamped amnesty program for ex-fighters and talks with leaders in the region. A Nigerian militant group said on Saturday that it blew up three pipelines in the oil-rich Niger River delta, the third attack in as many days, as it steps up an offensive to cripple the West African nation’s oil and gas industry.
“The recent spate of attacks by militants disrupting oil and power installations will not distract us from engaging leaders in the region in addressing Niger delta problems,” Buhari said.