The former Vice President and People Democratic Party (PDP) Presidential Candidate, Atiku Abubakar, has said that President Bola Tinubu and his team can do better on issues of forex presently troubling Nigerian economy, if they are open to sound counsels, as well control internal bleedings occasioned by corruption and poorly negotiated foreign loans.
He explained that the Nigerian economy would begin to find a footing again only after the present administration revisit its forex free-floating policy that has almost turn the country into a nightmare in less than a year of the new government.
Atiku noted that the new forex policy recently introduced by the government has done more harm to the country and its people, alleging that Nigeria has insufficient, unstable, and precarious foreign reserves to support a free-floating rate regime, and that the country’s reserves did not have enough foreign exchange that can be sold freely at fair market prices during crises.
The former vice president. through a statement released on Sunday from his media office, claimed that Tinubu did not allow the CBN to design and implement an adequate FX management policy that would could deal with issues as increasing liquidity, curtailing and regulating demand, dealing with FX backlogs and rate convergence.
He said that Tinubu’s new FX management policy was hurriedly put together without proper plans and consultations with stakeholders such that lead to failure of the government to anticipate and downplay the potential and real negative consequences of its actions.
The PDP presidential candidate disclosed that Nigeria is not earning enough dollars from its sales of crude oil on the ground that production of oil has been declining and that the country is not attracting foreign investment in appreciable quantities.
According to him, the wrong policies of the Tinubu’s administration continue to cause untold pain and distress on the economy and Nigerians cannot keep quiet when, clearly, the government has demonstrated sufficient poverty of ideas to redeem the situation.
“I knew full well that the economy of the country was heading for the ditch and came up with a number of policy prescriptions that would rescue the country from getting into the mess that we are currently in.
“If the government will not hold on to their usual hubris, there are ways that the country can walk out of the current crisis’, he added.
He said: “I firmly believe that if and when the government is ready to open itself to sound counsels, as well as control internal bleedings occasioned by corruption and poorly negotiated foreign loans, the Nigerian economy would begin to find a footing again.
“These are enough reasons for Nigeria to seek to have a greater control of the market, at least in the short to medium term when convergence is expected to be achieved”, he added.
Atiku indicated that he would have put in place proper policy such that could fixed exchange rate system and that the results from such decision would have brought about a strong and competitive economy, had it been he was elected as Nigeria president during 2023 election,
He stated that himself and his team would have encourage CBN to adopt a gradualist approach to FX management and that a floating system would have been a preferred option, with intervention of the apex bank to control and stabilize Naira value whenever it flatulates.
“A fixed exchange rate system would be out of the question. First, it would not be in line with our philosophy of running an open, private sector friendly economy. Secondly, operating a successful fixed-exchange rate system would require sufficient FX reserves to defend the domestic currency at all times. But as is well known, Nigeria’s major challenge is the persistent FX illiquidity occasioned by limited foreign exchange inflows to the country. Without sufficient FX reserves, confidence in the Nigerian economy will remain low, and Naira will remain under pressure. The economy will have no firepower to support its currency. Besides, a fixed-exchange rate system is akin to running a subsidy regime!
“On the other hand, 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. In simple terms, in such a system, the Naira may fluctuate daily, but the CBN will step in to control and stabilize its value. Such control will be exercised judiciously and responsibly, especially to curve speculative activities”, he added.
Atiku said: “Tinubu’s new policy FX management policy was hurriedly put together without proper plans and consultations with stakeholders. The government failed to anticipate or downplayed the potential and real negative consequences of its actions.
“The Government did not allow the CBN the independence to design and implement 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”.
