Nigeria central bank will struggle to defend the naira

Significance

This gives priority to selected local manufacturers who will now have easier access to forex at official rates. This forms part of a broader CBN programme aimed at supporting chosen sectors to promote import substitution, increase local production and non-oil exports and reduce pressure on forex holdings.

Impacts

• The rising cost of wheat due to Russia's invasion of Ukraine may worsen food insecurity and poverty.
• Nigeria may introduce food or crop export bans to contain the impact of rising food prices.
• Nigerian authorities will fail to resolve the ongoing fuel scarcity crisis in the coming weeks.