Nigeria says Saudi plans substantial support for foreign-exchange reforms
Saudi Arabia plans to provide “substantial” financial support for Nigeria’s foreign-exchange reform process, the West African nation’s information minister said.
“To support the central bank’s ongoing reforms of Nigeria’s foreign-exchange regime, the Saudi government will make available a substantial deposit of foreign exchange to boost Nigeria’s forex liquidity,” Information Minister Mohammed Idris said in a statement on Friday. He didn’t provide further details on the funding.
The pledge came in a meeting on Friday in Riyadh between Nigerian President Bola Tinubu and Saudi Crown Prince Mohammed Bin Salman, the minister said.
Nigeria began allowing its currency to trade more more freely against the dollar in mid-June, resulting in a devaluation of about 40%. It’s seeking to attract more dollar inflows and improve liquidity that had dried after years of pegging the naira against the dollar. Meanwhile, the parallel market thrived on the back of an inflexible official exchange.
The authorities are currently trying to clear a backlog of dollar demand that the government last month estimated at $6.7 billion. The shortage of hard currency has contributed to the naira falling to record low on both the official and parallel markets.
“Prince bin Salman commended the economic reforms being implemented by President Tinubu, and expressed the commitment of the Saudi government to supporting these reforms,” Idris said.
Saudi Arabia also plans to invest in a revamp of Nigeria’s oil refineries, the minister said. Those investments will be led by state oil company Aramco, with the upgrades to be completed within three years.
Additional investments are being considered in Nigerian agriculture and renewable energy. The two countries will spend the next six months developing a roadmap and blueprint for the proposed investments, Idris said.
