Managing Foreign Exchange Denominated Liabilities: Issues & Options

"For years, the dollar's role as the major global currency has been termed an 'exorbitant privilege'." — a phrase coined by French Finance Minister and later President, Valéry Giscard d'Estaing.

Nigeria, has for years resisted the need to diversify its economy hence it was inevitable that what was initially considered as an 'exorbitant privilege' is now being seen as a hindrance to effective business operations. Though there are various reasons for Nigeria's economic decline, it is impossible to ignore the fact that the root cause for the current economic stagflation is inexorably linked to the foreign exchange (FX) trap.

While Government's response to the current FX malaise has at best been meek, its actions have been largely characterized by disproportionate and incoherent policies. Though 2017 has been touted as the watershed for the Nigerian economic recovery with economic experts projecting positive Gross Domestic Product (GDP) figures and appropriate pricing