Reno Omokri, a prominent member of the Peoples Democratic Party (PDP), has provided insight into the floating of the naira policy implemented by the All Progressives Congress (APC)-led administration.
Following President Bola Tinubu’s directive to the Central Bank of Nigeria (CBN) to abolish the multiple exchange rate system, the apex bank instructed Nigerian banks to trade the dollar at the Investors and Exporters (I&E) rate.
In a Twitter post on Friday, Omokri argued that the multiple exchange rate system was essentially a disguised subsidy that primarily favoured the business class.
He claimed that last year, the CBN reportedly spent $8 billion to artificially maintain the value of the naira.
According to Omokri, this expenditure on defending the naira against the dollar exceeded Nigeria’s annual infrastructure budget.
He further stated that such funds ultimately flowed out of the Nigerian economy and primarily benefitted traders and foreign investors, rather than local manufacturers.
Omokri asserted that the multiple exchange rate system had a detrimental impact on made-in-Nigeria products, as it made imported goods more affordable than domestically produced ones.
As an example, he highlighted the closure of the Dangote Tomato paste factory in Kano State, where imported tomato paste from Peter Obi, the presidential flagbearer of the Labour Party in the last general election, was sold at a lower price, rendering the local production uncompetitive.
Read the full tweet here:
How Floating The Naira Benefits You
When the Central Bank of Nigeria used to set the value of the Naira and defend that value by artificially pumping Dollars into the market, you, as an ordinary citizen, did not benefit. It was another fuel subsidy. But this time, the subsidy…
— Reno Omokri (@renoomokri) June 16, 2023
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