Without a doubt, the pain and misery in Nigeria today, is majorly attributable to the ‘farce’ called exchange rate management that we adopted – attempting to float a huge stone on water! The resulting pain across Nigeria is worse that that during the civil war.
Floating the naira or any other currency should not be embarked on without sound preparation as surgeons do before any invasive surgery. And in the case of floating the Naira, preparation is not about wait time for miracle to happen but is about what you do, well thought out steps taken by smart people in government ahead of any so called-floatation. What the Tinubu government did and which we see today in Nigeria is not Naira floatation but, “Naira sinking.” Nothing is floating here. Certainly not the Naira. In simple terms, the Naira was sunk, and we know who to hold responsible. We were taken into war by leaders or perhaps jokers, people who were ill-prepared and without the weapons – loads lots of dollars – which Nigeria required to embark on the sensible floating of the Naira.
It was good for Tinubu to have first removed the subsidy in May when he said “subsidy gone.” After that, there should have been a pause to work out how to transmit the excess Naira from subsidy removal and which was accruing to the tiers of government into good use via a credible, jointly-agreed economic infrastructure plan to create thousands of jobs for jobless Nigerians and to open up local communities especially farm belts with the view to cut the over 40% post-harvest waste associated with our perennial inability to get the food from the farm to the market. This should ease the current food insecurity crisis. Doing this also would have bought Nigeria the time to negotiate with financial institutions and Nigerians who are the owners of the over $30bn now idle in domiciliary accounts in banks, AfDB, Afrexim bank, IMF and World bank so as to have in place up to $50bn-$100bn support fund needed to float the naira. Instead we went into war like drunken sailors and the bloodbath awaits.
Today the fuel subsidy burden at N1trn a month is more than double what it was on May 29, 2023 and Nigerians have seen absolutely no gain from the ballooning FAAC resulting from subsidy removal that was attempted in May. Whichever way you look at it, what we now have is a monumental and calamitous collapse of the Nigerian economy and of lives and businesses of Nigerians.
