Abuja — Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, yesterday, said despite the apparent gloomy picture of the country's economy, the future was bright and positive, especially in the light of recent inflow of $1.8 billion.
The positive assessment came as Secretary to the Government of the Federation (SGF), Senator George Akume, said the hardship being experienced by Nigerians would, undoubtedly, lead to a better tomorrow, with drop in the cost of living.
However, the Catholic Bishops of Nigeria expressed concern over the rising hardship in the country.
Similarly, former Vice President Atiku Abubakar lamented that the President Bola Tinubu administration was not "ready to open itself to sound counsel, as well as control internal bleedings occasioned by corruption and poorly negotiated foreign loans".
But the presidency faulted Atiku, saying he muddled up facts in an attempt to rubbish the foreign exchange policy of the Tinubu administration.
At the same time, Bauchi State Governor Bala Mohammed lamented that the current free fall of the naira against the dollar had put his government's plans in jeopardy.
That was as the African Development Bank (AfDB) warned that Nigeria, Ethiopia, Angola, and Kenya risked social unrest owing to rising prices of fuel and other commodities.
Cardoso, who spoke yesterday during the opening of the plenary session of the Catholic Bishops Conference of Nigeria (CBCN) at their secretariat in Abuja, said with the policy reforms being implemented by the federal government, there was light at the end of the tunnel.
As a mark of the positive economic prospect, Cardoso said the country received an inflow of about $1.8 billion last week.
He maintained that the positive outlook had been confirmed by several international economic rating organisations, such International Monetary Fund (IMF) and Fitch Ratings.
The CBN governor disclosed that the national monetary policy meeting would be convened this week to take decisions on how to further deepen the economic reforms and make them more result-oriented.
He said, "That positive outlook comes from the fact that a series of reforms have been made by the federal government and the central bank, which are now paying off in such a way that international investors are coming back in again.
"Recently, as a result of some of the particular reforms that the central bank came in with, over the course of the last week, $1.8 billion came into the market.
"As long as we can sustain a positive trajectory, I am confident that we will get out of this and the foreign exchange market will begin to moderate itself.
"In another week or so, we will have the Monetary Policy Committee meeting, a very critical meeting which helps to direct the course of the economy."
On the challenges currently facing Nigeria's economy, Cardoso said the country needed to take measures to actualise the vision of becoming a producing nation, far from the present consumer attitude. He said a lot of money had been pumped into the economy through "Ways and Means", which were presently contributing to the inflationary trend the country was witnessing.
According to him, "A lot of supply has gone into the system, over a period of time, unfortunately. And that goes back to all the things we've been talking about Ways and Means and I'm sure there's nobody here in this room that has never had a concept of Ways and Means. I'm sure there's nobody.
"We've been talking about it over a period of time. And quite frankly, it has come to haunt us through so much liquidity going into a system in a relatively short space of time. And that's in itself has fuelled the inflationary pressures, which we all have the witnessing of recent.
"Undoubtedly, Nigeria is going through challenging times on the economic front and this is not something that will be new to anybody. Reflecting on this, I wonder if, perhaps, things could have been done differently earlier.
"And what do I mean by that? You've got to move as a country beyond being a consumer nation. You've got to move as a country beyond being a consumer nation.
"And it is something that we, as Nigerians, have been talking about for so long, for so many years, for decades. But, really, we've not been able to actualise that. That's something very important.
"The other thing, of course, is to moderate appetite for foreign goods. And that's closely related to what I had said earlier with respect to becoming a producer nation.
"Modulating appetite, because at the end of the day, many of the things you see and many of the things that bother a lot of people with respect to foreign exchange is all essentially down to demand and supply."
The CBN governor said the country's economy was on the path of recovery, adding that several credit rating organisations, including IMF and Fitch, have attested to this.
He stated, "Indeed, there is hope. It's amazing to me. I must say that while we find a lot of Nigerians embracing what they call the Japa syndrome, the foreign investors are coming in.
"Foreign investors are coming in and you can take it from somebody, who sees this all the time. They come to us all the time. Foreign investors come all the time. They ask the right questions.
"They make their notes, they go away. A month later, they come back again. They monitor progress the way they come back again, and as we have consistently enacted, setting policies they've seen.
"They put their money in the international rating agencies standard and Fitch, even the World Bank, has raised us from stable to more positive because they've seen it. They've seen it.
"These are not people or interest groups that will go and write something for the sake of writing. It's very, very difficult many times to be able to defend some of the questions they ask.
"Once they see it, they analyse it. They test their hypotheses and then they come up with their own conclusions and they can see a positive trajectory."
In his remarks, Akume said the federal government was already addressing the challenges and hardship in the country and, soon, Nigerians would witness a drop in transportation cost as well as prices of goods.
Akume listed several interventions that the present administration had made to cushion the current hardship in the country and address insecurity.
He stated, "Let me, at this point, place on the record that despite the humongous inherited and emerging socio-economic challenges, the administration of President Bola Ahmed Tinubu has in less than nine months in the saddle recorded positive accomplishments in diverse sector.
"This administration inherited a daunting economic landscape, necessitating decisive action to alter our nation's downward trajectory. With unwavering dedication, we are striving towards a prosperous, healthy, and globally competitive Nigeria."
Akume said the bishops' conference was apt, adding that the country must remain steadfast, "Renewing our faith in God's provision and protection."
Earlier, President of the Catholic Bishops Conference of Nigeria (CBCN), Most Rev. Lucius Iwejuru Ugorji, in his opening speech, said the church was worried about the prevailing hardship in the country and government's apparent inability to address the challenges.
Ugorji said the federal government's reform agenda was fast becoming counterproductive, adding that government's efforts at addressing insecurity have been a failure.
The CBCN president said, "No doubt, the government is trying its very best to fix our battered economy and security outfits. If we have to be very frank with ourselves and not wallow in self-delusion, we must admit that we are faced with a case where therapy is worse than the disease.
"The government's reform agenda is turning out to be counterproductive. Despite the efforts of the government to boost our economy, our nation has continued to sink economically deeper and deeper into a bottomless pit."
Ugorji said what was expected was a drastic cut in the cost of governance for those in charge of governance, but this was not forthcoming, as politicians had continued to live in affluence and waste.
Regarding the fight against corruption, the church said the government needed to sit up to tackle the increasing rate of corruption. They said unless the country's anti-corruption agencies were able to conclusively prosecute and jail those accused of corruption, their effort would remain a mere dream.
The bishops said they were maintaining the position of the church that there would be no blessing of same sex marriages or union in Africa.
Primate of the Church of Nigeria, Anglican Communion, Archbishop Metropolitan, Most Rev. Henry Ndukuba, canvassed the unity of all God's people, emphasising the need for interfaith dialogue to forge greater harmony.
Ndukuba also said the current hardship in the country should be given a priority, adding, "If we do not address the issue of biting hunger in the land, there will be no church."
According to him, the church must speak out on the challenges facing Nigerians.
On his part, Imo State Governor Hope Uzodinma appealed to Nigerians to show understanding with the government as it grappled with the economic challenges.
Uzodinma said the harsh economic situation was a global thing, adding that with the right attitude, Nigeria would be able to overcome it in no distant time.
Archbishop of Abuja Catholic Archdiocese, Most Rev. Ignatius Kaigama, solicited the support of the government in the church's effort to provide education and health facilities for the people.
Atiku: Tinubu Not Ready for Sound Counsel
Former Vice President Atiku Abubakar lamented that the President Bola Tinubu government was not "ready to open itself to sound counsel, as well as control internal bleedings occasioned by corruption and poorly negotiated foreign loans".
Atiku said there had been an exacerbation of poverty and privation across Nigeria, and it was clear "the government has demonstrated sufficient poverty of ideas to redeem the situation".
The former vice president said via his X handle that he and other patriots could not keep quiet. He stated that the country's economy was "heading for the ditch", unless Tinubu was ready to urgently implement "a number of policy prescriptions".
According to Atiku, "At a meeting called at his instance on Thursday to address the foreign exchange crisis and the problem of economic downturn, among others, Bola Tinubu failed, yet again, to showcase any concrete policy steps that his administration is taking to contain the crises of currency fluctuation and poverty that face the country.
"Rather, he told the country and experts, who have been offering ideas on how to resolve the crisis that he and his team should not be distracted and allowed time to continue cooking their cocktail that has brought untold hardship to the people of Nigeria.
"I don't agree with that. 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, clearly, the government has demonstrated sufficient poverty of ideas to redeem the situation. If the government will not hold on to their usual hubris, there are ways that the country can walk out of the current crisis."
Atiku offered recommendations, saying, "After a careful assessment of the state of our economy at the twilights of the last administration, 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.
"Those ideas, encapsulated in my policy document, titled: My Covenant With Nigerians, made the following prescriptions: I had signed on to a commitment to reform the operation of the foreign exchange market.
"Specifically, there was a commitment to eliminate multiple exchange rate windows. The system only served to enrich opportunists, rent-seekers, middlemen, arbitrageurs, and fraudsters.
"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 stabilise its value. Such control will be exercised judiciously and responsibly, especially to curve speculative activities.
"Why control, you may ask. (i). Nigeria has insufficient, unstable, and precarious foreign reserves to support a free-floating rate regime. Nigeria's reserves did not have enough foreign exchange that can be sold freely at fair market prices during crises.
"(ii). Nigeria is not earning enough US$ from its sales of crude oil because its production of oil has been declining. And, (iii). Nigeria is not attracting foreign investment in appreciable quantities.
"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."
Atiku dismissed Tinubu's foreign exchange strategy as hasty and bereft of proper planning.
He stated, "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.
"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."
Presidency Replies Atiku, Says Facts Muddled Up
The presidency, yesterday, faulted Atiku, saying he muddled up his facts in an attempt to rubbish the foreign exchange policy of the Tinubu administration.
Special Adviser to the President on Information and Strategy, Bayo Onanuga, delivered the rebuke in a statement.
Onanuga said Atiku also failed to prescribe a better policy option to what the governor of Central Bank of Nigeria (CBN), Olayemi Cardoso, and his team were executing at the apex bank. He refuted Atiku's insinuation that the crux of the meeting held last week between Tinubu and the 36 states governors was the foreign exchange crisis and currency fluctuation.
Rather, Onanuga said the discussion centred on food supply and how to drastically reduce food prices. He added that the meeting established a nexus between the state of security and the rising cost of food, while it was observed that hoarders were warehousing food, creating artificial scarcity leading to high cost of food items.
The statement said, "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.
"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."
Onanuga also said it was false and preposterous for Atiku to claim that CBN's forex management policy was hurriedly put together without proper plans and consultation with stakeholders, and that the apex bank was hamstrung by the Tinubu government in implementing a sound fx management policy.
He said, "That would have dealt with such issues as increasing liquidity, curtailing/regulating demand, dealing with FX backlogs and rate convergence."
Onanuga stressed that contrary to Atiku's claim, the CBN was also implementing a raft of policies to stabilise the naira and end volatility in the market, and explained that the intervention was already yielding positive results.
Onanuga added, "Capital importation into the country is increasing, according to the latest NBS report. In the fourth quarter of 2023, Nigeria recorded a 66.27 per cent 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."
The presidential spokesman stated that when juggled with the policy options being implemented by the CBN, Atiku's alternative of a controlled floatation of the naira was similar to the policy of former CBN Governor Godwin Emefiele.
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Onanuga explained that this was the time an estimated $1.5 billion was spent monthly to defend the naira, while arbitrage or round tripping perpetrated by people close to the corridors of power went on unhindered.
Mohammed: Naira's Free Fall Jeopardising My Plans
Bauchi State Governor Bala Mohammed lamented that the current free fall in value of the naira to the dollar was putting the plans of his government in jeopardy.
Speaking yesterday during the executive council meeting at the EXCO chambers of the Government House, in Bauchi, Mohammed regretted that the bad economic condition occasioned by soaring prices of goods and services might delay the completion of projects across the state.
He said a lot of initiatives had been taken to meet the yearnings and aspirations of the people of the state.
"I think there is a problem, and, of course, the economy is bad, it is almost a free fall for naira and most of our postulations or forecasts economically, our plans are put in jeopardy because we may not be able to achieve within the time line," the governor said.
Mohammed decried the high cost of materials, saying, "Even the projects that we flagged-off may not be achieved and this is a stark reality. Cement is almost three times the cost of estimate."
The governor stated that almost everything, including local materials, were soaring in prices, adding that the country's food security is also in jeopardy.
Mohammed observed that there was hunger and anger in the country due to high cost of food, and urged members of the executive council to, on their own, roll out initiatives that would add to the common good of the state.
"You don't have to wait until you are told to do something that you believe within your own assessment of things that are good for the state," he stated.
The governor recalled that a lot of projects and programmes had been rolled out since the inception of his administration in 2019, saying the projects are focused on social impact on the masses.
Mohammed stated, "You can see what we are doing - health, education, humanitarian services and other things. We have to look at things passionately, of course, we are at the centre in the country and we are almost the food basket."
He said he noticed that on daily basis truckloads of food left the state to other places, stressing that the government would do everything possible to get relief for the people of Bauchi State.
Mohammed said, "What are we doing to make sure we have relief for our people? The best we can do is to pay salaries and wages but even the salaries and wages are grossly inadequate to put food on the table.
"We are on course. What we need more is teamwork, to be more serious in terms of knowing that as members of council, you are the representatives of the governor and government."
AfDB: Nigeria, Angola, Others Risk Social Unrest over Cost of Living
African Development Bank (AfDB) warned that Nigeria, Ethiopia, Angola and Kenya risked social unrest owing to rising prices of fuel and other commodities.
AfDB, in its macroeconomic performance and outlook report for 2024, projected the continent's economy to grow higher than the 3.2 per cent recorded in 2023. It further warned that internal conflicts could arise from an increase in energy and commodity prices occasioned by currency depreciation or subsidy removal, referencing Nigeria, Angola, Kenya and Ethiopia, where energy subsidies were removed.
AfDB stated, "Internal conflicts and violence could also result from rising prices for fuel and other commodities due to weaker domestic currencies and reforms.
"For instance, the removal of fuel subsidies in Angola, Ethiopia, Kenya and Nigeria and the resulting social costs has led to social unrest driven by opposition to government policy."
The bank also said the increase in geopolitical tensions in Eastern Europe and the Middle East, coupled with the El Nino phenomenon, could trigger supply chain disruptions, which could exacerbate energy and food inflation across the world, with Africa more vulnerable to these shocks.
AfDB further warned that regional conflicts and political instability occasioned by disruptions in constitutional governments could have deleterious economic costs, with resources meant for development and social support channelled into security and defence.
It cautioned that unconstitutional takeover of government might lead to sanctions, with negative implications for the economy.
