President Bola Tinubu has talked about why he chose to unify the exchange rate windows. The President says he could have chosen to keep the previously multiple foreign exchange system and benefit from it, but instead, he decided to unify the official and parallel market rates to save the country from financial hemorrhage.
The president spoke at a civic reception organised in his honour by the Lagos state government at the Lagos house, Marina, on Thursday.
According to a statement by Dele Alake, special adviser to the president on special duties, communications, and strategy, Tinubu said he took the decision in the nation’s best interest, just as he did with the removal of petrol subsidy.
The president said it was imperative to take those decisive actions in the early days of his administration.
“I could afford to share the benefit by participating in the arbitrage, but God forbid! That’s not why you voted for me,” he said.
“We need to take the steps to stop the bleeding of our finances through speedy action on fuel subsidy. We have no choice,” he said.
Tinubu said as a way of ensuring good use of available resources, the government would “re-engineer the effectiveness of the control and management of our resources in order to meet the obligations to Nigerians by political officeholders”.
He also solicited the support of governors present at the event to work with him in ensuring the even development of the country.
“We will work together with an open-door policy. We will bring Nigeria from the brink to a resilient economy. I want us to be partners so that we can rescue our land and make it a born-again nation,” he said.
On June 14, the Central Bank of Nigeria announced the unification of all segments of the forex exchange (FX) market, implying that the exchange rate will rise or fall based on the supply and demand in the market.
On Tuesday, the naira appreciated by 0.67 percent to N763 to a dollar at the investors and exporters (I&E) window.
The apex bank’s new policy followed a declaration by Tinubu that the “monetary policy needs thorough house cleaning. The Central Bank must work towards a unified exchange rate”.
Other significant reforms have been implemented in the financial sector, including the removal of restrictions on inflows into domiciliary accounts.
On Tuesday, the apex bank pegged daily transaction limits to N50,000 for contactless payment.
Commending Tinubu’s reforms, David Malpass, former president of the World Bank, had said Tinubu was “taking concrete steps to scrap Nigeria’s harmful government subsidies and multiple exchange rates.”
“These are important steps toward currency stability, lower inflation, and reduced corruption in Africa’s most populous country,” he added.