In a robust display, Nigeria’s currency, the Naira, surged ahead against the US Dollar at the foreign exchange market on Monday, maintaining its upward trajectory.

Official data from FMDQ revealed a noteworthy appreciation as the Naira strengthened to N750.15 against the Dollar at the close of Monday’s trading, marking an impressive gain of N40.75 compared to Friday’s exchange rate of N791.25/$1.

Simultaneously, the parallel market experienced a surge, with rates climbing to N1,130/$1 on Monday from the previous N1,140 on Friday.

Dayyabu Mistila, a Bureau De Change operator in Wuse Zone 4 Abuja, verified the uptick, confirming sales at N1,130 and purchases at N1,140 on Friday.

This surge follows a remarkable N31.23 gain recorded on Wednesday, defying October’s inflation hike in Nigeria, as reported by DAILY POST.

As the Naira continues its winning streak, all eyes turn to the upcoming economic roadmap presentation by the Central Bank of Nigeria (CBN) Governor, Dr. Olayemi Cardoso, at the annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria on Friday, 25th November, 2023.

A substantial 37% surge in the market cost of rice has left the staple food in short supply, intensifying concerns over the widening annual supply gap. The AFEX Wet Season Crop Production Report for 2023 reveals that the availability drop has resulted in a staggering two million metric tonnes increase in the supply deficit each year.

The report states, “Rice consumption in Nigeria has been steadily increasing, nearly matching the annual population growth projection of 2.6 per cent at two per cent. This has led to a supply gap of about 2 million metric tonnes annually.”

Nigeria, once Africa’s top rice producer in 2021, with an output of 8.3 million metric tons, now faces challenges due to surging consumption rates. Despite potential net rice export capabilities, the country has spent over $15 billion in the past decade to meet its escalating rice consumption.

The Rice Outlook report by the U.S. Department of Agriculture predicts Nigeria’s importation of 2.1 million metric tons of rice in 2024, potentially making the nation the world’s leading rice buyer. This follows the recent decision by the Federal Government to lift the ban on rice importation.

While the ban was in place, imports plummeted by 98.4% between January and July 2022. The increase in rice prices is attributed to production setbacks caused by flooding and the repercussions of global market dynamics.

Factors contributing to the global rice price surge include India’s ban on rice exports, the world’s second-largest rice exporter, and potential production impact from El Nino in key regions. Rain-induced disruptions and quality variations during Vietnam’s summer-autumn harvest have further fueled the price hike. The report anticipates a 4% increase in rice production with an additional 32% rise in the price of paddy rice.

The Federal Government of Nigeria has announced a shift in the Nigerian Customs Service (NCS) Exchange Rate for import duties, moving from ₦770.88/$ to ₦783.174/$. This adjustment, implemented just five months after the Central Bank of Nigeria (CBN) floated the Naira, aligns with recent moves toward a single exchange rate regime.

President Bola Tinubu’s commitment to economic stability has driven these changes. However, the transition, combined with existing economic challenges and fiscal policies, has led to a 70% decline in importation, resulting in higher clearing costs in Nigeria compared to other African nations.

Concerns about port congestion and lingering cargoes prompted a meeting led by the Minister of Marine and Blue Economy, Adegboyega Oyetola. The Nigerian Customs Service has responded by forming a committee, empowered by the new Customs Act, to dispose of containers exceeding their allotted time in ports, aiming to address decongestion issues.

Comptroller-General of Customs, Adewale Adeniyi, said the primary goal of port decongestion is to enhance efficiency and trade facilitation.

Importers and clearing agents now face the challenge of adapting to the new exchange rates, potentially leading to increased business costs. Already, economic impacts are being felt, raising concerns about the prices of used cars and other goods.

As the government aims to boost revenue collection, experts warn that 2024 may bring increased hardships for the masses. The rising prices and their effects on businesses could lead to discontent, causing disruptions in various sectors.

Analysts suggest that the government should demonstrate sensitivity to challenging economic conditions and consider implementing palliative measures for citizens and businesses. The heightened costs imposed by stringent fiscal policies may further strain the delicate economic situation, potentially impacting local and international trade. Stakeholders closely monitor the unfolding economic landscape.