The Presidency says a controlled floatation of the naira to prevent further devaluation would only return Nigeria to the economic regime of the embattled former Governor of the Central Bank of Nigeria, Godwin Emefiele.
It said the policy, which saw about $1.5bn spent monthly to shore up the naira, fuelled financial malpractices, such as arbitrage which hurt the economy.
The Special Adviser to the President on Information and Strategy, Mr Bayo Onanuga, made this assertion in a statement he signed Sunday titled, ‘Once again, former Vice President Atiku Abubakar got it wrong.’
Onanuga was responding to a former Vice President and presidential candidate of the People’s Democratic Party at the 2023 polls, Atiku Abubakar, who argued that Tinubu’s economic policies, especially the unification of the exchange rate, were implemented hastily without adequate planning and proper consultations with stakeholders.
President Tinubu’s economic reforms of the past nine months have sparked collateral instability in the value of the naira, heaping hardship on Nigerians as food prices continue to soar.
Atiku criticised the government, saying, “The wrong policies of the Tinubu administration continue to cause untold pain and distress on the economy and the rest of us cannot keep quiet when the government has demonstrated sufficient poverty of ideas to redeem the situation.”
He argued that “Given Nigeria’s underlying economic conditions, adopting a floating exchange rate system would be an overkill. We would have encouraged the Central Bank of Nigeria to adopt a gradualist approach to FX management.
A managed-floating system would have been a preferred option.
”Atiku observed that the naira might fluctuate daily in such a system, but the CBN would step in to control and stabilise its value.
“Such control will be exercised judiciously and responsibly, especially to curb speculative activities,” he noted.
But the Presidency disagreed, saying, “Atiku’s alternative of a controlled floatation of the naira is similar to the policy of Godwin Emefiele when an estimated $1.5bn was spent monthly to shore up the naira, while arbitrage or round-tripping went on unhindered. Sadly, it was perpetrated by people close to the corridors of power.”
Onanuga noted that last Thursday’s meeting between the President, his vice, and state governors was not to discuss currency fluctuation as Atiku claimed but food supply and how to drastically reduce the fluctuation in food prices.
Citing Tinubu’s plea to governors to allow the CBN to work and his stance not to establish a commodity board, he said, “We expected Alhaji Atiku to praise President Tinubu for maintaining this stance and for not interfering with the business of Central Bank.
“It is false and preposterous for Atiku to claim that CBN’s FX management policy was hurriedly put together without proper plans and consultations with stakeholders and that the apex bank is hamstrung by Tinubu’s government in implementing a sound FX Management Policy’ that would have dealt with such issues as increasing liquidity, curtailing/regulating demand, dealing with FX backlogs and rate convergence.’
“Contrary to former VP Atiku’s claim, Cardoso’s CBN is implementing a raft of policies to stabilise the naira and end volatility in the market and this is already yielding some positive results,” he added.
The Presidency also cited figures from the National Bureau Statistics for Q4 2023, which stated that Nigeria recorded a 66.27 per cent increase in capital inflow, compared with Q3, before Cardoso arrived at CBN—in Q3, the capital inflow was $654.65m and rose to $1.09bn in Q4.
“Atiku will agree that the rise in capital inflow suggests massive investors’ confidence in Nigeria and the policy direction of the Tinubu administration,” it argued.
Therefore, it said when juxtaposed with the policy options being implemented by the CBN, Atiku’s alternative of a controlled floatation of the Naira is similar to the policy of Godwin Emefiele.
Also reacting to Atiku, the National Publicity Director of the APC, Ibrahim, said Emefiele was a product of the PDP government.
He said, “Whatever crisis the financial institutions in Nigeria are facing or whatever the country is facing with regards to forex, it is the offshoot of the PDP policy that is manifesting in Nigeria today. Whatever blame apportioned for the forex challenges we are having, the larger part of it should go to the PDP for producing Godwin Emefiele as governor of the Central Bank of Nigeria.”
