Tinubu’s FX policy saved Nigeria’s economy from total collapse — ACF chieftain

Arewa Consultative Forum (ACF) Chieftain and ex-Secretary General of the Northern group, Elder Anthony Sani, has applauded President Bola Tinubu over his exchange rate policy, saying it has prevented the nation’s economy from total collapse.

According to him, the previous governments of Muhammadu Buhari and Goodluck Jonathan sustained the Nigerian exchange rates artificially, which hindered the economy’s growth.

Elder Sani, in a statement on his Facebook page on Friday, said, “So, President Tinubu chose the way out of the problem rather than continuing with surface dressing and collapsing the country. He chose to allow the naira to find its real worth and value without the government borrowing to subsidise it by fixing it at an artificial value to look popular while the country was almost collapsing.”

Sani also remarked that Tinubu chose to allow petrol to sell at its market price with a bit of regulation to avoid overburdening Nigerians, as we heavily rely on petrol for so many other things.”

He added, “It’s about Tinubu peeling open our economic wounds and now dressing them to heal totally, unlike the surface dressing of past administrations, which were mere balms for pain relief without treating the wounds.”

Further stressing the present exchange rate crisis in the country, the former ACF scribe said, Tinubu could order the Central Bank of Nigeria (CBN) to peg the exchange rate at N30 to $1, “but at what cost to our economy?”

He said: “If President Tinubu wanted the naira to exchange for N30, he could order the CBN to peg the exchange rate. However, this would require the government to cover the shortfall in the form of a subsidy to the forex market. This was what former presidents were doing. It was an artificial exchange rate.”

Referring to previous governments, he noted that under Jonathan, the federal government pegged it at N380 to $1 and was subsidising to maintain that rate with $750 million monthly.

“Under Buhari’s administration, the amount required to maintain the peg increased, so it was raised to N750 to $1 to reduce the subsidy burden. The administration was paying $1.5 billion monthly to the forex market to keep the rate,” he added.

“If Tinubu had continued in that direction, it would have required over $5 billion monthly to subsidise the exchange rate at N1,000 to $1.

“These subsidy funds led us to huge loans from Brentwood, China, etc., as almost all our resources were going towards subsidising petrol, forex, electricity, etc., which were primarily benefiting the rich and elites in the nation.

READ ALSO: Arewa Consultative Forum denies endorsing Jonathan for 2023

“It became clear that Nigeria was heading for total collapse as 98% of our total revenue was going towards debt servicing. That meant after paying for debt services, we needed to borrow more to handle other government responsibilities, including workers’ salaries.”

The ACF Chief lamented that it was clear Nigeria was nearing bankruptcy and almost collapsing, adding that the Tinubu’s “administration inherited a reserve of over $33 billion 16 months ago. Since then, it has paid back the inherited forex backlog of $7 billion.”

“It also cleared the ways and means inherited debt, which was used to maintain the forex rate under Obasanjo, Jonathan, and Buhari’s administrations, keeping the naira below its actual value. So, the ways and means debt of over N30 trillion was cleared by Tinubu’s administration without incurring any new debt,” the elder statesman added.

“The administration has also reduced the debt service ratio from 97% of our total revenue to 68%. Despite all this, it has managed to keep the foreign reserve up at $37 billion and continues to meet all other obligations and pay bills without resorting to borrowing like before

“Like the president said, ‘We found ourselves at a dizzying crossroads, where we must choose between two paths: reform for progress and prosperity or carry on business-as-usual and collapse. We decided to reform our political economy and defence architecture.’”

Meanwhile, Sani expressed optimism, saying, “There will be a better Nigeria. Let’s persevere and support the Tinubu administration to succeed.”