The floating of the naira and the removal of petrol subsidies have led to huge increases in the prices of goods and services.
The presidency on Sunday dismissed a proposal by former Vice President Atiku Abubakar on the management of Nigeria's foreign exchange crisis and its impact on the economy.
Presidential spokesperson Bayo Onanuga said Atiku got his "facts muddled up" and that his proposal was similar to that implemented by the Muhammadu Buhari administration which the current government has described as corrupt.
"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, when an estimated $1.5 billion 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 powers," Mr Onanuga wrote in a statement sent to PREMIUM TIMES.
Atiku had earlier on Sunday said the floating rate system adopted by the economic managers of the Tinubu administration was contributing to the economic woes of the country.
The floating of the naira and the removal of petrol subsidies have led to huge increases in the prices of goods and services, worsening poverty and making basic necessities out of the reach of millions of Nigerians.
"Given Nigeria's underlying economic conditions, adopting a floating exchange rate system would be an overkill," Atiku wrote on X.
"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."
In his reaction, Mr Onanuga dismissed Atiku's suggestions.
Read the full statement by Mr Onanuga below:
STATE HOUSE PRESS STATEMENT
ONCE AGAIN, FORMER VICE PRESIDENT ATIKU ABUBAKAR GOT IT WRONG
Former Vice President, Atiku Abubakar, in an attempt to rubbish the foreign exchange policy of the Tinubu administration got his facts muddled up again. He also failed to prescribe a better policy option to what Governor Olayemi Cardoso and his team are executing at the apex bank.
First of all, it was not true that President Tinubu's meeting last Thursday with the 36 State Governors was centred on discussing foreign exchange crisis and currency fluctuation.
What was discussed in the main was food supply and how to drastically reduce the food prices. The Minister of Information, Alhaji Mohammed Idris, gave a briefing about the meeting, revealing the highlights to State House Correspondents.
One was that the meeting established a nexus between the state of security and the rising cost of food. Another was that hoarders are warehousing food, creating artificial scarcity and thus enabling the high cost of food items.
The decisions at the meeting reflected the main points discussed: Forest rangers are to be strengthened and armed, while police are to recruit more men and the National Economic Council to deepen discussions about creating state police.
President Tinubu also affirmed his approval for the release of 42,000 Metric tonnes of grains from the national reserve. Government is also in discussion with rice millers to get another 60,000 metric tonnes. President Tinubu said he does not support price control and importation of food. Nigeria, he believes, can grow enough food to feed its citizens and spare some for export.
The present government is executing the cultivation of 500,000 hectares for wheat, maize, and rice, in many states. Governors are expected to participate in this programme, one of the reasons for last Thursday's meeting.
There was no deliberation as former VP Atiku claimed on currency fluctuation. As Alhaji Atiku should know, this is the business of the Central Bank, which has the autonomy to handle the country's monetary policies. As a matter of fact, the President enjoined the governors, in passing, to allow the CBN do its work and refrain from dabbling into what is within CBN's purview.
***If he would be true to himself and what actually transpired at the meeting, unlike the lies he spewed, 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'.
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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.
Capital importation into the country is increasing, according to the latest NBS report. In the fourth quarter of 2023, Nigeria recorded a 66.27 percent increase in capital inflow, compared with Q3, before Cardoso's arrival at CBN. In Q3, capital inflow was $654.65 million. It rose to $1.09 billion in Q4.
Alhaji Atiku will agree that the rise in capital inflow suggests massive investors' confidence in Nigeria and the policy direction of the Tinubu administration.
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, when an estimated $1.5 billion 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 powers.
Bayo Onanuga
Special Adviser to the President on Information & Strategy
February 18, 2024
