Since assuming office on May 29, 2023, President Bola Ahmed Tinubu has been steadfast in his commitment to Nigeria’s economic transformation.
Two key policy decisions have taken center stage in his agenda.
Firstly, President Tinubu took decisive action by ending the petrol subsidy regime, citing its unsustainable costs amidst dwindling resources. The resulting savings from this move have been channeled towards crucial investments in public infrastructure, education, healthcare, social welfare, and economic prosperity for millions of Nigerians.
The removal of the petrol subsidy has yielded significant results. According to data released by the National Bureau of Statistics, petrol importation has decreased by 50 percent, equivalent to one billion liters per month. Additionally, crude oil production has witnessed a steady increase, reaching an average of 1.55 million barrels per day in Q4 2023, compared to 1.22 million barrels per day in the previous quarter.
Moreover, the removal of the subsidy has led to a surge in monthly allocations to states through the Federal Accounts Allocation Committee (FAAC), providing governments at all levels with substantial funds to deliver on their promises to the Nigerian people.
It is worth noting that the removal of the petrol subsidy enjoyed unanimous support from the three major candidates during their campaign. It is, therefore, disconcerting to witness some individuals who previously advocated for the removal now expressing opposition. Such insincerity undermines the progress of our nation and our democracy.
President Tinubu’s second significant pronouncement centered on achieving a unified exchange rate through the Central Bank of Nigeria (CBN). In pursuit of a transparent and equitable monetary policy, the CBN courageously loosened control over foreign exchange rates, allowing access to foreign currency at market-determined rates based on the principle of ‘willing seller, willing buyer.’
While recognizing that these policy measures are not instant remedies, the government acknowledges their foundational importance in paving the way for sustainable economic growth and prosperity. Esteemed economists and experts concur that these reforms, although challenging and requiring short-term sacrifices, are indispensable in unlocking Nigeria’s economic potential.
The CBN has proactively implemented a comprehensive strategy to enhance liquidity in the forex market. In addition to unifying exchange rates, the bank has successfully resolved a significant portion of outstanding forex obligations and introduced new operational mechanisms for commercial banks, Bureau De Change (BDC) operators, and International Money Transfer Operators (IMTOs).
Encouragingly, these efforts are bearing fruit. The naira is stabilizing, and the foreign exchange market is experiencing a surge in inflows. Recent figures from the National Bureau of Statistics indicate a 66 percent increase in capital importation into Nigeria in Q4 2023 compared to the previous quarter. The CBN Governor also highlighted a substantial $1.8 billion inflow into the forex market last week, spurred by the new reforms.
Unfortunately, the CBN’s reform agenda has faced fierce resistance from speculators and unscrupulous actors both within and outside the country, who profit from the existing dysfunction and lack of transparency.
To combat these challenges, regulatory and enforcement agencies have collaborated tirelessly to counteract efforts aimed at undermining the reforms. This strategic alliance has led to the identification, investigation, and sanctioning of individuals and organizations involved in illegal activities and sabotage within the forex market.
The government has directed relevant regulatory and security agencies to remain vigilant, ensuring that any malpractices capable of undermining the currency are thwarted, and those responsible are held accountable. The government remains resolute in its commitment to safeguarding its efforts from jeopardization.
The emerging stability of the naira is in the best interest of all Nigerians. The government reassures the public that it will take further steps to stabilize the currency and protect the economy.
During these challenging times, the government seeks the patience and understanding of Nigerians as it strives to usher in a season of abundant benefits and renewed hope. President Tinubu and his team remain steadfast in their commitment to bringing immediate relief and enduring prosperity to all Nigerians.