The presidency said that a regulated Naira floating to stop additional devaluation would only bring Nigeria back to the economically troubled past of Godwin Emefiele, the embattled former governor of the Central Bank of Nigeria.
The policy, which saw monthly expenditures of about $1.5 billion to support the Naira, was said to have encouraged financial malpractices like arbitrage that were detrimental to the economy.
This claim was made in a statement titled “Once again, former Vice President Atiku Abubakar got it wrong” that Mr. Bayo Onanuga, Special Advisor to the President on Information and Strategy, signed on Sunday.
Atiku Abubakar, a former vice president and Democratic Party presidential candidate in the 2023 elections, claimed that Tinubu’s economic policies—particularly the unification of the exchange rate—were rushed into action without sufficient planning or stakeholder consultation. Onanuga was replying to Abubakar.
Over the last nine months, President Tinubu’s economic reforms have caused collateral instability in the value of the Naira, causing hardship for Nigerians as food prices continue to rise.
In a statement criticizing the administration, Atiku stated, “The rest of us cannot keep quiet when the government has demonstrated sufficient poverty of ideas to redeem the situation.” The wrong policies of the Tinubu administration continue to cause untold pain and distress on the economy.
“A floating exchange rate system would be an overkill given Nigeria’s underlying economic conditions,” the speaker contended. We would have pushed for the Central Bank of Nigeria to handle foreign exchange in a gradualist manner. It would have been better to have a managed-floating system.
According to Atiku, the CBN will intervene to regulate and stabilize the value of the Naira even though it may fluctuate on a daily basis under such a system.
According to him, “Such control will be exercised judiciously and responsibly, particularly to curb speculative activities.”
However, the Presidency disagreed, stating, “Atiku’s alternative of a controlled floatation of the Naira is similar to Godwin Emefiele’s policy, when arbitrage or round-tripping went on unhindered, and an estimated $1.5 billion was spent monthly to shore up the Naira.” Unfortunately, those close to the corridors of power were responsible for it.
The discussion between the president, his vice, and state governors last Thursday, according to Onanuga, was not about currency fluctuations as Atiku had claimed, but rather about the availability of food and ways to significantly lessen price fluctuations.
We expected Alhaji Atiku to commend President Tinubu for sticking to his position and not meddling in the Central Bank’s operations, he said, citing Tinubu’s appeal to the Governors to permit the CBN to function and his refusal to form a commodity board.
“Atiku’s assertion that the CBN’s FX management policy was hastily assembled without adequate planning or stakeholder consultation is unfounded and absurd. It implies that the government of Tinubu is impeding the apex bank’s ability to implement a sound FX management policy, which would have addressed matters like augmenting liquidity, limiting or regulating demand, addressing FX backlogs, and achieving rate convergence.”
“The CBN under Cardoso is putting in place a number of policies to stabilize the Naira and put an end to market volatility, and this is already producing some positive results, contrary to former Vice President Atiku’s claim,” he continued.
Before Cardoso joined the CBN, in Q3, Nigeria recorded a 66.27 percent increase in capital inflow; in Q3, capital inflow was $654.65 million, and it increased to $1.09 billion in Q4 2023, according to figures the Presidency also cited from the National Bureau Statistics.
It stated that Atiku would concur that the increase in capital inflow indicates strong investor confidence in Nigeria and the direction of the Tinubu administration’s policies.
Thus, it stated that Atiku’s alternative of a controlled floatation of the Naira is comparable to Godwin Emefiele’s policy when compared to the options for policy being implemented by the CBN.
