“Sadly, as with any effort to reform and sanitise a system entrenched in long-term malpractice, the CBN’s efforts have been met with ferocious resistance.”
Nigeria’s federal government on Friday, fumed that ongoing policy initiatives to sanitise the monetary system was facing fierce resistance from saboteurs, speculators and other unscrupulous players within and outside the country, whom he alleged were reaping from dysfunction and opacity.
The Minister of Information and National Orientation, Mohammad Idris, made the allegation on the fierce resistance the monetary system was facing in a statement.
Also, on Friday, the Special Adviser on Economic Affairs in the office of the Vice President, Tope Fasua, reaffirmed that while the current policies of the government may have brought about hardship, they would ultimately pave way for future growth.
Idris, stressed that relevant regulatory and security agencies had been placed on the red alert to ensure that malpractices capable of undermining the Naira were averted and that those engaged in such acts were brought to book, adding that the federal government would not allow its efforts to be jeopardised.
“Sadly, as with any effort to reform and sanitise a system entrenched in long-term malpractice, the CBN’s efforts have been met with ferocious resistance from speculators and other unscrupulous players within and outside our country, who profit from dysfunction and opacity.
“To tackle this, regulatory and enforcement agencies of the government have been working round the clock in the past few days, joining forces to address these efforts at undermining the reforms.
That strategic alliance has led to the intelligence-led identification, investigation and sanctioning of individuals and organisations involved in illegal activities and sabotage within the forex market.
“Relevant regulatory and security agencies have been directed to remain vigilant to ensure that malpractices capable of undermining our currency are averted and that those engaged in these acts are brought to book,” Idris said.
He, however, assured the public that the ongoing reforms to address the raging economic volatility had started to yield results as the Naira had begun to gain stability against other currencies.
Idris asserted that when President Bola Tinubu was sworn in on May 29, 2023, he made far-reaching statements regarding his economic vision for the country, pronouncing an immediate end to the petrol subsidy regime as it was not sustainable and promising to channel the savings accruing from the removal into much-needed investments in public infrastructure, education, healthcare, social investment and prosperity for millions of Nigerians.
He noted that since the removal of the petrol subsidy, petrol importation had dropped by 50 percent, amounting to one billion litres monthly, according to data released by the National Bureau of Statistics, while crude oil production had steadily increased to an average of 1.55 million barrels per day in Q4 2023, from 1.22 million barrels per day in the preceding quarter.
The minister also stated that since the subsidy removal, monthly receipts by states from the Federal Accounts Allocation Committee (FAAC) had surged giving governments at all levels billions of Naira in extra headroom to deliver the dividends of democracy to Nigerians.
He described as egregious that all the three other major candidates in the 2023 presidential election, who were stridently unanimous in their campaign messaging about the need to remove petrol subsidy were now pretending to be against it.
According to the minister, “this insincerity does not bode well for our country and our democracy.”
He added that the President’s second most far-reaching pronouncement was his promise that the Central Bank of Nigeria (CBN) would work towards a unified exchange rate.
He noted that in line with his vision for a more transparent and equitable monetary policy, without jettisoning its operational independence, the CBN took the very bold step of loosening control of foreign exchange rates, allowing access to foreign exchange to take place at market rates determined on the principle of ‘willing seller willing buyer.’
“As a government, we are not under any illusion that these policy moves are silver bullets, or that nothing else is required. We understand that these are foundational fiscal and monetary policy moves, upon which we must now build the superstructure of true economic growth and prosperity.
“As respected economists and experts have acknowledged, these foundational reforms will be difficult and painful for Nigerians in the short-term. At the same time, there is the consensus that they are inevitable, given just how much they have held back robust and lasting economic growth.
“The problems that we are solving are no doubt multifaceted, intertwined, and deep-rooted, requiring creative, strategic, decisive, and multi-pronged solutions. These bold moves being implemented are in full alignment with what is required,” Idris said.
He said the CBN had been proactive, initiating a comprehensive strategy to enhance liquidity in the forex market, adding apart from unifying the rates, the bank had also cleared a significant amount of outstanding forex obligations, and outlined new operational mechanisms for commercial banks, Bureau De Change (BDC) operators and International Money Transfer Operators (IMTOs).
“It is heartwarming to note that we are starting to see the results. Indeed, the Naira is stabilising, and the foreign exchange market is seeing a surge of inflows.
The latest NBS figures show that capital importation into Nigeria rose by over 66 percent in Q4 2023, compared with the preceding quarter. The CBN Governor has also highlighted the fact that $1.8 billion flowed into the forex market last week, on the back of the new reforms,” he said
He described the emerging stability of the Naira as a development that was in the interest of all Nigerians, saying Nigerians should rest assured that the government would continue to take further steps to stabilise the Naira and safeguard the economy.
Fasua restated that while current policies of the government may bring about hardship, they would ultimately pave the way for future growth.
Fasua stated this at a virtual Economist Conference organised by Proshare, where discussions centered on the theme, “Policy Crossroads: The Choice between Strangulation and Expansion.”
He emphasised the importance of assessing and reassessing the crucial policies of fuel subsidy removal and currency floatation, both implemented weeks apart.
