Wale Edun, the minister of finance and coordinating minister of the economy, says Nigeria must increase oil production to resolve foreign exchange (FX) supply challenges.
Edun made this known when he spoke to journalists on Tuesday at the G24 news conference held alongside the International Monetary Fund (IMF)/ World Bank annual meetings in Washington DC.
As an oil-dependent economy, Nigeria relies on the oil and gas sector for its FX receipts and to bolster its external reserves.
However, the sector has been underperforming due to infrastructural challenges and crude theft, contributing only 5.7 percent to the total real gross domestic product (GDP) in Q2 2024.
On October 14, the Organisation of Petroleum Exporting Countries (OPEC) reported that Nigeria’s average daily crude oil production fell to 1.32 million barrels per day (bpd) in September 2024.
“…regards to Nigeria, the key about the foreign exchange market really is supply. Of course, as you know, we are an oil-producing country. We just need to get our oil production up [and] that will deal with the issue of foreign exchange supply and pressure on foreign exchange every time there are large flows,” he said.
“In terms of single digit inflation, the rich countries, they have effectively defeated inflation, and that’s why their interest rates can come down.”
Edun explained that the governor of the central bank in Nigeria, in response to high inflation, is continuing with monetary tightening, which is the standard approach.
Discussing lessons learned from implementing structural programmes in Nigeria, the minister stressed the importance of social safety nets to support the poor and vulnerable in managing the immediate costs, especially the spike in living expenses.
“There needs to be certain poverty alleviation initiatives,” he said.
“Link to that focus on helping the poor and most vulnerable people is communication. I think one of the critical things in carrying out these macroeconomic reforms, is communicating what is being done, what is to be expected and the timing of the various activities and then communicating what actually has been done.”
Edun emphasized that if a programme is designed to provide direct benefits, it should be made public.
The minister added that there should be a dashboard for people to track progress, “thereby engendering and building public trust.”
