The presidential candidate of the Labour Party (LP) in the 2023 general election, Peter Obi, has faulted the decision of the Central Bank of Nigeria (CBN) to float the FX market, arguing that the Nigerian government cannot float a currency it doesn’t supply.
He also took a swipe at the way the Federal Government removed the fuel subsidy. The former Anambra State governor said the government should have removed the criminality and corruption that characterized the implementation of the fuel subsidy policy rather than the subsidy itself. He criticized the Tinubu-led government for removing the fuel subsidy without having adequate and properly structured palliatives put in place to cushion its effects on Nigerians.
Peter Obi said this during an interview on an AriseTV News programme, Morning Show, on Monday, where he explained that he would have devalued the naira instead of floating it.
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He said “You can’t float a currency you don’t have supply… It’s like building a non-gated house in a criminal-ridden society. You have to have a defense mechanism. Nobody floats what you don’t have a supply of.
“Nobody floats his currency without having adequate supply. When you don’t have adequate supply, there were pressures, there was criminality in our exchange rate regime. Again, we should have worked on eliminating those criminality and excesses in our foreign exchange regime because there are strong unmet demands.
“The naira was under pressure and a bit overvalued, everybody knew that. So, what he would have done was to devalue the currency. We were at N412 before now.
“Devaluation to about N600 or thereabout will have been it, while trying to manage the supply by making sure that we deal with issues. What controls your exchange rate? It’s a simple thing, it’s your reserve. And what controls your reserve is your export. You have avenues and things that you will have exported; you’re supposed to export from your oil to other minerals to everything.”
Talking about the removal of fuel subsidy, Obi said “We are suffering from what is called, ANNOUNCEMENT EFFECT. The removal of fuel subsidy was not thought through. It showed limited thinking, that’s why it’s having limited outcomes.”
Obi said the best approach would have been to collaborate with various stakeholders to find a way to remove the fuel subsidy in an organized manner and ensure that the proceeds from its removal would be invested in critical development areas. He added that he would have removed the excess demand that is not factual, thereby reducing our fuel consumption in the country by 50%.
He said, “I have always said we are consuming far above what we should be consuming. Our consumption is just about half of what it is. For me, the approach would have been to remove the corruption and criminal side of the fuel subsidy.
“Remove the excess demand that is not factual and by doing this, you would have reduced it to like 50%. The remaining 50% is what would have been able to, after consultations with various stakeholders, find a way in an organized manner, to remove and ensure the proceeds of the removal are invested in a critical development area.
“When you do it in an organized manner, with proper palliatives that are well structured, not done haphazardly, you would have been able to see Nigerians go along with you.
“Policies like this are not what you just announce haphazardly. They are things you talk through and that’s what we would have done in the Labour Party.
“What this government has been doing since inception, are announcements with limited thinking which again produces limited outcomes. There must be a coordination between the federal, the state and the local governments in trying to pull through this difficult time.”
The Labour Party’s candidate emphasized the need to reduce the use of the US dollar within Nigeria to strengthen the Naira. He noted that the US dollar has become widely circulated in the country, almost like an underground currency. By reducing reliance on foreign currencies and promoting the use of the Naira, the candidate believes that Nigeria can work towards stabilizing its currency and improving economic conditions.
“The dollar has become what you can call an underground currency of our economy. it shouldn’t be. We have a currency called Naira. All these things that people are using dollar to do which is not productive should be removed and I can tell you it will strengthen the currency.
“Today if people want to do a party primary, they would share dollar. That is not our country’s currency and that should warrant a penalty,” he said.