Tony Elumelu, the Group Chairman of Heirs Holding and United Bank of Africa (UBA) Plc, has attributed the decline in the value of the Nigerian naira to a heightened demand for the U.S. dollar, which stems from a lack of confidence in the country's economy. This decline, the most significant in a month since the naira replaced the British pound in 1973, has seen the currency drop over 10 percent against the dollar.
Elumelu made these remarks during his appearance on Bloomberg Television, where he discussed the state of the Nigerian economy. He pointed out that people are stockpiling dollars due to their uncertainty about the economy's direction. However, he expressed optimism that as the government implements sound policies, such as harmonizing exchange rates and eliminating petroleum subsidies, confidence in the currency will be restored.
Furthermore, Elumelu emphasized the need for the government to address fundamental issues like insecurity and oil theft, which have been draining the country's resources. He believes that with these challenges tackled and consistent policies in place, the Nigerian economy will stabilize and grow.
Elumelu also mentioned that recent changes in leadership, including the appointment of a new Central Bank governor and positive policy statements from the president, are expected to boost confidence in the economy and ultimately improve the exchange rate. He called for patience and highlighted the importance of ongoing discipline and direction in policymaking for a smoother economic path.