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Hardship: Tinubu Lacks Ideas To Fix Nigeria’s Economy – Atiku
Former Vice President, Alhaji Atiku Abubakar has said until President Bola Tinubu allows himself to be ruled by wise counsel, Nigeria’s economy will continue to be in a doldrum.
Atiku in a statement issued on Sunday, regretted that the president sees experts who have been offering ideas on how to resolve the crisis as detractors.
He stated that at a meeting called at his instance last Thursday to address the foreign exchange crisis and the problem of economic downturn, President Tinubu failed to showcase any concrete policy steps that his administration was taking to contain the crises of currency fluctuation and poverty that face the country.
The former vice president said Tinubu’s new foreign exchange management policy was introduced without proper plans and consultations with stakeholders.
“The government failed to anticipate or downplay 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,” he stated.
Atiku who was the candidate of the Peoples Democratic Party (PDP) in 2023, expressed the belief 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.”
According to him, “the government has demonstrated sufficient poverty of ideas to redeem the situation,” and blamed Tinubu’s wrong policies on the pains and distress on the economy.
“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 said.
Atiku stated that after a careful assessment of the state of the nation’s economy at the twilights of Buhari’s administration, he knew full well that the economy was heading for the ditch, and came up with a number of policy prescriptions that would rescue the country from getting into further mess.
This, he added, was encapsulated in his campaign document, stating that he would have reformed the operation of the foreign exchange market if he had been elected president.
“Specifically, there was a commitment to eliminate multiple exchange rate windows. The system only served to enrich opportunists, rent-seekers, middlemen, arbitrageurs, and fraudsters,” he noted.
The former vice president pointed out that a fixed exchange rate system would be out of the question, adding, “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!”
Atiku stated that given Nigeria’s underlying economic conditions, adopting a floating exchange rate system would be an overkill, disclosing that he would have encouraged the Central Bank of Nigeria (CBN) to adopt a gradualist approach to FX management.
“A managed-floating system would have been a preferred option,” he added, stating that in the event that the naira fluctuates, the CBN would step in to control and stabilise its value.
“Such control will be exercised judiciously and responsibly, especially to curve speculative activities,” he assured.
He said he would opt to control the exchange rate of the naira because 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.
“Nigeria is not earning enough US$ from its sales of crude oil because its production of oil has been declining,” he stated, adding that the country is not attracting foreign investment in appreciable quantities either.
“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 argued.