Atiku’s plan will damage economy, says President

The administration claims that a managed Naira floating to stop additional devaluation would only bring Nigeria back to the financial system headed by the troubled former governor of the Central Bank of Nigeria, Godwin Emefiele.

It claimed that the strategy, which saw monthly expenditures of roughly $1.5 billion to support the Naira, encouraged financial malpractices like arbitrage that were detrimental to the economy.

Declared in a statement he signed on Sunday, “Once again, former Vice President Atiku Abubakar got it wrong,” is the claim made by Mr. Bayo Onanuga, Special Advisor to the President on Information and Strategy.

In response to Atiku Abubakar, the Peoples Democratic Party’s presidential candidate in the 2023 elections and a former vice president, Onanuga stated that Tinubu’s economic policies—particularly the unification of the exchange rate—were rushed into action without sufficient planning or stakeholder consultation.

Nigerians are suffering as a result of the Naira’s collateral instability brought on by President Tinubu’s economic reforms over the last nine months, which have also caused food prices to rise.

The government is being criticized by Atiku, who stated, “The rest of us cannot keep quiet when the government has demonstrated sufficient poverty of ideas to redeem the situation.” The wrong policies of the Tinubu administration continue to cause untold pain and distress on the economy.

In his view, implementing a floating exchange rate system would be excessive given Nigeria’s fundamental economic circumstances. A gradualist approach to foreign exchange management is what we would have urged the Central Bank of Nigeria to take. An option that was managed-floating would have been better.

The CBN will intervene to regulate and stabilize the value of the Naira, according to Atiku, even though it may fluctuate daily under such a system.

He stated, “This kind of control will be used sensibly and responsibly, particularly to stop speculative activities.”

Nevertheless, the Presidency expressed disagreement, stating, “Atiku’s alternative of a controlled floatation of the Naira is similar to the policy of Godwin Emefiele, when arbitrage or round-tripping went on unhindered.” An estimated $1.5 billion was spent each month to shore up the Naira. Tragically, those near the corridors of power were responsible for it.

The president, his vice, and state governors met last Thursday, according to Onanuga, to discuss how to significantly lessen price fluctuations in food supplies rather than currency fluctuations, as Atiku had claimed.

“We expected Alhaji Atiku to praise President Tinubu for maintaining this stance and for not interfering with the business of Central Bank,” he said, citing Tinubu’s appeal to Governors to allow the CBN to operate and his stance against establishing a commodity board.

The assertion made by Atiku that the CBN’s FX management policy was hastily assembled without adequate planning or stakeholder consultation is ludicrous and untrue. It implies that the apex bank is being prevented from implementing a sound FX management policy by Tinubu’s government, which would have addressed matters like boosting liquidity, reducing or controlling demand, addressing FX backlogs, and rate convergence.

Cardoso’s CBN is putting in place a number of policies to stabilize the Naira and put an end to market volatility, he continued, and these are already having some positive effects. This is in contrast to former Vice President Atiku’s assertion.

In Q4 2023, Nigeria recorded a 66.27 percent increase in capital inflow compared to Q3, prior to Cardoso’s arrival at CBN. In Q3, capital inflow was $654.65 million, and it increased to $1.09 billion in Q4, according to figures cited by the Presidency from the National Bureau Statistics.

According to the argument, “Atiku will agree that the rise in capital inflow suggests massive investors’ confidence in Nigeria and the policy direction of the Tinubu administration.”

That is why it stated that Atiku’s proposed controlled Naira float is comparable to Godwin Emefiele’s policy when compared to the options for CBN policy being implemented.