ECONOMISTS have urged Nigerians to take advantage of short-term assets investments such as treasury bills, commercial paper and government securities amid concerns over Nigeria’s currency fluctuations.
The advice follows rising currency problems that the country is experiencing, fuelled largely by weak exports, high inflation at 18.6 per cent, and oil theft.
Although the naira appreciated on August 1, 2022 at the parallel market, exchanging at N695 to the dollar, market watchers insist the temporary gain might not be sustained as Nigeria still struggles with the supply side of the foreign exchange market.
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An economist, who is the Chief Executive Officer of Cowry Assets Limited, Johnson Chukwu, told THE ICIR that Nigerians could look towards short-term investment assets like the treasury bill and government bonds.
“Treasury bills and bonds are short-term assets Nigerians can look for now,” Chukwu said.
Another economist, Michael Ani, told our correspondent that Nigerians could look towards savings bonds as a way to hedge their funds against naira depletion.
“Retail investors could look at savings bonds, which currently gives about 9.5 per cent to 10 per cent. Some of them go as high as 11.5 per cent. There’s one maturing in three years time, which goes as high as 12 per cent.
“Its a government-backed instrument, and the default rate is low,” Ani said.
He noted that as the government seeks to raise more money from the domestic market, there is the need for Nigerians to take advantage of savings bonds now, since they could come with a good rate.
“The depletion of the current value of the naira may have lowered government’s appetite for a eurobond. They are looking at the domestic market through bond issuance,” he said.
He stressed the importance of Nigerians seeking the services of investment bankers to scale avoidable financial problems at this time.
Nigeria has been having currency problems, with the naira suffering a free fall, which has heightened the volatility of the economy, pushing up inflation.
A major source of worry is the dependence on mostly the dollar for the importation of petroleum products, fertilizer and many raw materials, a situation that has put intense pressure on the local currency.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.