Stabilizing the Naira for Economic Viability and Reconstruction at Post Covid-19 Pandemic Era

Abstract

The present state of the economy after COVID-19 with eight months lockdown brought about no production in the country; whereby people were feeding on their savings and capital, which amounted to low investments in the country. This paper aims to critically analyze way forward in stabilizing the naira for economic viability and reconstruction at post covid-19 pandemic era; by examining the exchange rate of the Nigerian Naira against the exchange rates of the US dollar. The researchers found out that sharp drop in the nation foreign exchange was as a result of slowdown in economic activities. The exchange rate from naira to dollar in September, 2021 dropped from N382.75 in April, 2020 to N409 a dollar. The associated effect of this has undoubtedly stiffened the economic wellbeing of the people as the prices of goods and services have highly increased without a commensurate increase in the volume of goods and services: thus, resulting to hyper-inflation. Adding that, the effect of COVID-19 poses an outstanding threat such that the federal of Nigeria’s finance were hit by both low oil prices in the international market partly occasioned by low economic activities. To remedy the situation, CBN took certain steps to include partnership with commercial banks to go after Nigerians who falsely buy dollars under the pretense of travelling abroad, licensing of new BDCs was suspended among others. The study concludes that education and healthcare sector contribute so much to this depletion; continued excess demand, heightened pressure on the foreign exchange market and exchange rates; CBN maintains floating exchange rate with the intention to control the exchange rate. Recommendation: Government should intensify efforts to restructure the base of the economy through deepening the production of goods/services in Nigeria; Government should fund imports from proceeds derived from exports rather than always relying on proceeds from crude oil, foreign investment in shares, and direct investments in agriculture among others. The implication of the study is that Government should promote research institution to march these unforeseen deadly diseases less this may cause further havoc to the economy in general.