Nigeria’s newly inaugurated President, Bola Ahmed Tinubu, has promised to unify the country’s multiple exchange rates, replacing the previous multiple exchange rate regime implemented by the Central Bank of Nigeria during the administration of former President Buhari.
President Bola Ahmed Tinubu’s decision to unify the exchange rate and force interest rates lower in Nigeria has potential implications for the Central Bank of Nigeria’s (CBN) independence.
Tinubu, who made the announcement during his inaugural speech on May 29, emphasized the importance of a unified exchange rate and the need to redirect funds from arbitrage to meaningful investments.
He also called for interest rates to be reduced, describing current rates as harmful to both Nigerians and businesses.
The central bank must work towards a unified exchange rate…they should direct the fund from arbitrage to meaningful investment. Interest rates need to come down, currently too high, anti-people, anti-business, we have to work on all of those.
President Tinubu’s decision to unify the exchange rate represents a departure from the previous administration’s multiple exchange rate system.
President Tinubu hopes to streamline the foreign exchange market and reduce distortions by implementing a unified exchange rate, attracting more investments, and boosting economic stability.
He also stated that the subsidy can no longer be justified in light of dwindling resources and that we will instead channel it to better investments such as public infrastructure, healthcare, and jobs, all of which will improve Nigerians’ lives.
On fuel subsidy, unfortunately, the budget that exist before I assumed office and what I have heard is that no provision is there for fuel subsidy, so Fuel subsidy is gone, Tinubu.