Atiku’s FX solution will return Nigeria to Emefiele era

The Presidency has countered Atiku Abubakar’s Foreign Exchange Solution, stating 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 programme, 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 titled ‘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.

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 remarked that the naira would fluctuate daily in such a system, but the CBN would intervene to control and stabilise its value.

“Such control will be exercised judiciously and responsibly, especially to curb speculative activities,” he noted.

However, 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 $1.5 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 power.”

According to Onanuga, the President, his VP, and state governors met last Thursday to discuss food supply and how to dramatically reduce food price fluctuations, not currency fluctuations, as Atiku stated.

Citing Tinubu’s appeal to governors to allow the CBN to function and his refusal to establish a commodity board, he added, “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 or 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 highlighted numbers from the National Bureau of Statistics for Q4 2023, which claimed that Nigeria had a 66.27 percent rise in capital inflows compared to Q3 before Cardoso started at the CBN—in Q3, capital inflows were $654.65 million and increased to $1.09 billion 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.

As a result, it stated that, when compared to the policy alternatives being implemented by the CBN, Atiku’s alternative of restricted Naira flotation is similar to Godwin Emefiele’s strategy.

In response to Atiku, the APC’s National Publicity Director, Ibrahim, claimed 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 is 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.”