It has been revealed that revenues from Nigeria’s ports may beat initial estimates this year after the country abandoned a peg on the naira in favour of a more flexible, market-driven exchange rate policy to alleviate dollar shortages that had been hurting businesses.
“By floating the naira and appointing primary dealers that are going to make dollars available, people can continue their businesses, which is good for the ports,” the Managing Director of Nigerian Ports Authority (NPA), Mallam Habib Abdullahi, said while speaking in an interview with Bloomberg.
Cargo traffic at Nigerian ports declined 9.6 per cent to 78.3 million metric tons in 2015 as importers struggled to obtain foreign exchange due to capital controls and oil prices slumped, the NPA said in April. The agency cut this year’s expected revenue to $1.2 billion compared with $1.8 billion realised in 2015, owing to “challenges” facing the ports, Abdullahi said.
The Central Bank of Nigeria allowed the currency of Africa’s biggest economy to float freely on Monday last week following a June 15 announcement that it would let a market-driven exchange rate alleviate the dollar shortage that has strangled companies and contributed to the contraction, for the first time since 2004, of the gross domestic product during the three months through March.
The naira gained 0.7 per cent to 280.50 per dollar as of 11.28 a.m. in Lagos on Tuesday after declining 29.6 per cent on Monday.
The new foreign-exchange policy, “may cause naira volatility but it will eventually stabilise,” the NPA Managing Director said.
He however said that the government must find a solution to the restiveness in the key oil and gas-producing Niger delta region.
He said the ports have been positioned to support the nation’s export drive. “We want people to be able to export solid minerals easily which will help diversify the economy,” he said.
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