In a recent interview aired on Channels Television’s News at 10, Bismarck Rewane, CEO of Financial Derivatives Company, shed light on the Federal Government’s substantial financial efforts to stabilize the naira amid ongoing economic challenges. Rewane revealed that approximately $8 billion has been expended in this endeavor, raising concerns about the effectiveness of government policies and the authenticity of market stability.
Rewane’s comments came on February 21, 2025, shortly after the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) meeting, where it was decided to retain the Monetary Policy Rate (MPR) at 27.50%. He emphasized that the government’s interventions aimed at managing exchange rate volatility and inflation concerns have been extensive, but may not reflect long-term viability.
“We’ve also borrowed $4 billion in bond issues. When you take a look at that, you’ll see there is a lot of work. We’ve actually spent almost $8 billion trying to support the naira at current levels,” Rewane stated. This significant expenditure raises questions about the sustainability of such measures and whether they constitute a genuine solution to the prevailing economic pressures.
Rewane also addressed the recent rebasing of Nigeria’s inflation data, which has led to varying interpretations of the country’s economic situation. He pointed out that there are three different methods for measuring inflation, each yielding different results. “There’s no way that inflation can reduce by 10% in a short period. The man on the street does not believe that inflation has come down as sharply as that,” he remarked, highlighting the disconnect between official figures and the lived experiences of the populace.
The ongoing pressure on the naira, coupled with inflation uncertainties, paints a troubling picture of the effectiveness of current government policies. While official narratives suggest that inflation is moderating, market realities tell a different story as consumers continue to face rising costs of living.
In contrast, CBN Governor Olayemi Cardoso, in his announcement following the MPC meeting, expressed optimism about recent macroeconomic developments. He noted, “At this meeting, the Monetary Policy Committee noted with satisfaction, recent macroeconomic developments which are expected to positively impact the price dynamics in the near to medium term.” Cardoso acknowledged the stability in the foreign exchange market and the moderation of prices for petrol (PMS) but also recognized the persistent inflationary pressures, particularly from food prices.
As Nigeria navigates these economic challenges, the insights from Bismarck Rewane serve as a critical reminder of the complexities involved in managing the nation’s financial landscape. The significant financial interventions to stabilize the naira may provide temporary relief, but the long-term effectiveness of such measures remains in question, urging policymakers to reassess their strategies in addressing the root causes of inflation and currency volatility.
