The Presidency states that a controlled floating of the currency to prevent further devaluation will merely return Nigeria to the economic regime of Godwin Emefiele, the beleaguered former Governor of the Central Bank of Nigeria.
It said that the program, which saw approximately $1.5 billion paid monthly to prop up the naira, encouraged financial malpractices such as arbitrage, which harmed the economy.
Mr Bayo Onanuga, Special Adviser to the President on Information and Strategy, made this claim in a statement released on Sunday headed ‘Once again, former Vice President Atiku Abubakar got it wrong.’
Onanuga was responding to Atiku Abubakar, a former Vice President and presidential candidate for the Peoples Democratic Party in the 2023 elections, who claimed that Tinubu’s economic policies, particularly the unification of the exchange rate, were implemented hastily and without adequate planning or consultations with stakeholders.
President Tinubu’s economic changes during the last nine months have caused collateral instability in the value of the naira, causing misery for Nigerians as food prices continue to rise.
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.”