Obi: No Country Floats Currency without Adequate Supply

•Says he would have devalued, borrowed to stabilise naira, boosted capital inflow through export  

•Declares FG’s financial palliatives, subsidy removal done haphazardly

•Tackles Tinubu on alleged certificate falsification, says it’s an issue of honour, integrity

James Emejo in Abuja and Funmi Ogundare in Lagos

The 2023 presidential candidate of Labour Party (LP) and former governor of Anambra State, Mr. Peter Obi, yesterday, criticised the President Bola Tinubu administration over the floating of the naira without detailed consideration of the supply-side implications.

Obi said the ill-thought-out policy had subjected ordinary citizens to untold hardship and negatively affected the economy.

Obi spoke on “The Morning Show,” on ARISE News Channel, the broadcast arm of THISDAY Newspapers.

Asked what he would have done differently if elected president, the LP presidential candidate said he would have devalued the currency, and borrowed to stabilise it, while also taking aggressive measures to boost foreign capital inflow through export promotion, among others.

The former governor berated the federal government for approving N35, 000 for federal workers as part of the palliatives following the removal of petrol subsidy. He described the measure as a product of “limited thinking, which, again, produces limited outcomes”.

Obi said, “You can’t float a currency you don’t have supply in control. It is like building a non-gated house in a crime-ridden society.

“You have to have a defence mechanism; nobody floats what you don’t have supply of. I believe now we have a new CBN team, they have to look at the overall monetary policy.

“Again, it is not something you announce haphazardly. Nobody floats his currency without adequate supply. If we don’t have adequate supply, there are pressures and criminality in our FX regime.”

He said the Tinubu administration should have, “Worked to eliminate those criminality and excesses in our FX regime. The naira was under pressure and a bit overvalued. So, what they would have done is to devalue the currency; we were at N412…devaluation of over N600 would have been it, while trying to manage the supply side by making sure we deal with other issues.

“What controls your exchange rate? It’s your reserves. And what controls your reserves? It’s your exports. You should encourage those things that will start dealing with the issues of earning more FX while trying to manage what you have rather than leaving it open to market forces.

“I can tell you that not even in the developed world has anyone left its currency to market forces because, sometimes, you might not control it and now it is difficult to control.”

He added, “And that is why I said this announcement effect would have been well thought through by a proper economic team and by consultation before announcing.”

Specifically, Obi said, “I would have devalued the currency and still ensure that what is available is used by the real sector.

“I am involved in a little bit of finance and I know that in every country involved, they are even trying to borrow money…yes you can do that.

“You are not just borrowing to defend the currency but to stabilise it temporarily while you are working aggressively on your exports.”

Obi also spoke against the continued dollarisation of the economy.

According to him, “The dollar has become an underground currency of the economy, it shouldn’t be. We have a currency called naira. All the things people are using the dollar to do, which are not productive, should be removed.

“Today, even if you want to do party primary, people are sharing the dollar, this is not our currency and there should be stiff penalties in dealing with that issue.

“If people earn it legitimately, let them spend it the way they want, but in a situation, where it has become a means of corruption and criminality in our system, we should be careful in managing it.”

Obi criticised the method through which petrol subsidy was removed, and insisted it was not well thought out by the current administration.

He said instead of doing things haphazardly, he would have “removed the corruption and criminal” aspect of subsidy and “remove the excess demand that is not factual and by doing this, you would have reduced it by 50 per cent”.

He said, “Let me reiterate my position; and I said fuel subsidy is an organised crime, as it was being practised.

“If you go and look at my tweet of September 19, 2022, and read my manifesto – the manifesto of the Labour Party – it showed clearly how we would have approached it. Fuel subsidy is an organised crime and I have said this repeatedly that it is going to be removed.

“During the campaign, I mentioned that what we were consuming is far above what we are supposed to be consuming. And if you listened to Governor Isa Yuguda’s interview recently, he said that a friend of his who was involved in fuel subsidy gains and everything told him that it was criminal and that he was even tired of making money through that type of crime – and that it should be removed. Which shows that there is a criminality and corruption side of it.”

Obi stated further, “And since subsidy has been removed, our consumption is just about half of what it is…

“For me, the approach is to remove the corruption and criminal side of it, remove the excess demand that is not factual and by doing this, you would have reduced it by 50 per cent.

“The remaining 50 per cent is what I would have, after consultation with various stakeholders, been able to find a way in an organised manner, to remove and show the proceeds of removal and the gains of the removal to be invested in a critical investment area, including education, health and pulling people out of poverty.

“When you do it in an organised manner, with proper palliatives that are well structured, not just haphazardly, you would have been able to see Nigerians go along with you.”

He also said, “One of the things we are suffering with this announcement is what I can call announcement effect. You see, policies like these are not what you would just announce haphazardly.”

Obi said he remained positive after the recent election tribunal judgement, adding, “When I look at what is happening now and comments of respected Nigerians and Nigerians, in general, it underscores the erosion of value that comes from the urgency of building a new Nigeria where things would be properly done based on people saying the truth, doing things rightly within the laws and behaviours that is required of a modern society.”

On the N35,000 provisional wage award approved for federal workers, Obi said, “For me, it is the issue of the temporality of it. If I am correct, he (Tinubu) said this will last for six months, or is it going to be permanent?

“If you look at what this government has been doing since inception, you could see announcements with limited thinking, which, again, produces limited outcomes.”

The LP presidential candidate called on the leadership of the country to deal with the issue of oil revenue leakages in order to stabilise the currency.

He said, “To secure Nigeria, we need to deal with the issue of oil revenue leakages. I can assure you that we will stabilise the currency, as you will be able to export more and earn more revenue. Going around in an unsecured war-torn area does not work.”

He expressed concern about the quality of leadership in the country, saying things are currently bad and need to be dealt with.

He stated, “There is nothing wrong with the Nigerian land, water or air, except our leadership. Character, competence, capacity, and integrity are the foundation of building a good leadership. Things have to be done differently in Nigeria with the properly team.”

Asked if he would work with the Tinubu administration if given the invitation, he stated that he was challenging, to a logical end, the process through which the current administration came into being.

According to him, “The process through which one comes into office is far more fundamental and what they do thereafter. It is important that people come through the right door.”

He explained that with alleged falsification of credentials by a leader, there was no way such a leader would do the right things.

Obi stated, “That is not good, morally, and a sign you should be giving to the society. There are so many great people in the world who did not go to a formal school or with bad academic records, so you don’t have to have all the degrees in the world to be great. But you need to be honest about your background, using great people like Abraham Lincoln, as instances, so we can know where exactly you are.”

On what the country could have done differently on the issue of Niger Republic, Obi said he was completely against military intervention as a process for leaders’ emergence.

He said, “I am a democrat and I believe in democracy and that should be the process. Will I go to war? No. The reason is that we have war at home. You cannot go to war externally.

“We are losing 400 barrels of crude oil every day. If you also considered illegal mining of our minerals by foreigners and locals alike, and other revenue leakages.

“I think the only war that Nigeria needs is war on insecurity and economy. I am going to deploy everything available to ensure that we win it.”