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Peter Obi warns CBN to end fixed foreign exchange rate

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The Presidential candidate of the Labour Party, Peter Obi, said he will eliminate the fixed exchange rate of the Central Bank of Nigeria (CBN) if elected into Aso Rock come 2023.

Obi said the government hasn’t allowed market forces to determine the movement of the foreign exchange rate, and this has to end, as the two forex rates currently run are fluke, and not reflective of the market reality.

The former Fidelity Bank chairman made this known in a statement published on his Twitter handle on Sunday, which he said are his view on the Nigerian economy.

“The truth is that for long market forces have not determined the exchange rate of the Naira. The two tier foreign exchange regime is a fluke. It has to end. Let the exchange rate be determined by the forces of demand and supply. It is that simple.

“Government must continue to collaborate with the organized private sector in this regard. Creating the enabling environment for raising employment must start with expanding the SMEs cluster via unfettered access to funding”, he wrote.

Read also: Peter Obi renews call for competent leadership in Nigeria

Obi also reiterated his stand on not borrowing for consumption, emphasising on the need to invest in regenerative projects. Recall that Nigeria’s debt profile had increased to N41.6 trillion at the end of first quarter this year, from N39.56 trillion level it was at the end of December 2021.

“We will stop borrowing for consumption. All loans must be invested in regenerative projects. Inflation is a factor of spending on goods and services outstripping production.

“Since we have not resolved the minimum wage issue, we will not use wage and price controls to fight inflation. Rather, we will pursue a contractionary monetary policy. We will mop up excess liquidity by reducing the money supply within an economy”, he said.

“Flutterwave, on its own, was recently valued at US$3 billion. We will create an enabling environment for our startups to thrive. Beyond creating access to easy funding, We will enforce the legal framework protecting foreign investors and their indigenous partners. This is the only way to improve our business environment and tamper capital flight”, the statement reads.

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