THE CRITICAL STATE OF THE NAIRA IN THE FISCAL ICU.
Battered and tattered, a weak Naira lies critically in the ICU with a dire need of the fiscal oxygen to resuscitate it but who will bell the cat?
As the 2027 elections approaches Atiku’s mantra borders on the restoration of the fuel subsidy in order to cushion the effect of the inflation while many other politicians have towed a similar pattern with the promise in the reduction of the pump price of fuel to as low as ₦200 if elected into power!
But what are the politicians’ proposals for fixing the weak Naira? This question is imperative because in their recent campaign slogans rather than focusing on fixing the weak Naira many of the politicians are banking on the restoration of subsidy, which may compound the problem.
One distinct politician whose silence in this regard is worrisome is Peter Obi and one wonders what could be his proposal for fixing the weak Naira?
In the build up to the 2023 Presidential elections Peter Obi planned to float the naira and combat inflation. He stated that he would abandon the multiple exchange regime and reduce the inflation rate in Nigeria.
He hinged his argument on the fact that the multiple exchange rate regime encouraged capital flight and deterred investment which invariably worsened the country’s forex situation.
Thus, to tackle inflation, he promised to remove fuel subsidies, address the fiscal imbalance and control Nigeria import dependent lifestyle. He insisted on a single forex window and promised to tackle food inflation by dealing with the insecurity situation in Northern Nigeria which has made it difficult for farmers to produce food.
He also proposed to tackle the unemployment rate in the country to less than 20% by boosting Nigeria’s current $20 billion diaspora remittances to $40 billion and then $60 billion annually.
He further added that there was the need to support modular refineries and local refining for domestic use and priced strictly in naira.
It’s interesting to note that Nigeria’s inflation rate accelerated to a 17-year high of 21.09% in October 2022, marking a 0.32% point increase from 20.77% recorded in September and that although President Tinubu’s recent claims of his gradual stabilisation of the economy barely scratches on the surface in terms of curbing the current inflation rate.
However, the question still remains that in the current political dispensation what is Peter Obi’s proposal for fixing the weak Naira?
His previous proposal to float the Naira may only worsen the matter as may be gleaned from the hapless efforts of Tinubu in that regard which ended up exposing the gaps between the high demands for dollars and the low structural supply, over reliance on importation, high domestic inflation and speculative purchases which had eroded confidence amongst investors thus leading to the hoarding of the dollar.
Amongst the top contenders for the Presidential elections in 2027, and in the absence of any ideas from Atiku and Tinubu, the question remains: “What is Peter Obi’s proposal for fixing the problem of the weak Naira?”
—— Vincent Okoroafor
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