By the time these meetings are concluded, we’ll be able to issue a definite statement on what the position of government is in this regard.:
Nigeria’s cabinet ministers have held emergency meetings over the economy and food prices as the government comes under pressure over the fallout from President Bola Ahmed Tinubu’s reforms.
Protests broke out on Monday in northern Niger state where demonstrators, mostly women and youths, blocked a major road in the state capital Minna to demand help over living costs.
Since coming to office in May, Tinubu has ended a fuel subsidy and currency controls, leading to a tripling of petrol prices and a spike in living costs as the naira slides sharply against the dollar.
Ministers of finance, information, budget and national planning, agriculture as well as the national security advisor, central bank director and other senior aides took part in the meetings which began on Tuesday.
“By the time these meetings are concluded, we’ll be able to issue a definite statement on what the position of government is in this regard,” Information Minister Mohammed Idris told reporters.
“All I can say is that discussions are ongoing, and very soon a solution is in sight for Nigerians.”
Ministerial meetings scheduled on Wednesday and Thursday were announced as Tinubu returned to Nigeria after a brief private visit to France.
Government officials have repeatedly urged Nigerians to be patient over the reforms, which Tinubu says will bring in more foreign investment to Africa’s largest economy.
But the short-term impact is hitting Nigerians hard: Inflation was at 28.92 percent in December, with food costs at 33.93 percent, according to the national bureau of statistics.
The naira currency has fallen swiftly against the US dollar since the government ended a multi-tier exchange rate system and freed up the local currency.
Before the reforms, the naira was trading at around 450 to the dollar, but on Monday it was trading at 1,400 to the greenback, according to the central bank.
That is close to the rate on the parallel black market.
A weaker naira makes imported goods more expensive as businesses pay more for the dollars they need to bring goods into the country.
In a research note, the Economist Intelligence Unit (EIU) said the central bank effectively devalued the naira last week, which could bolster investment, but it believed that the country’s foreign reserves would remain under pressure.
Africa’s largest oil producer, Nigeria has long struggled with foreign currency liquidity as its petroleum output lags and foreign investors remain skittish.
“We believe the improvement will take time to bed in and Nigeria will still need an IMF programme,” the EIU note said about the naira.
“The currency is now trading close to parallel market rate. This alone will not encourage large hard currency inflows without oil industry reform and other policy measures.”