The Labour Party (LP) presidential candidate, Mr Peter Obi, has stated that he would abandon the multiple exchange regime and reduce the inflation rate in Nigeria.
This was disclosed via a Twitter post where he listed some of the things he would do for the country if elected president in 2023.
He stated that the multiple exchange rate regime, which encourages capital flight and deters investment, has worsened the country’s forex situation.
Focus on Obi’s plan: To tackle inflation, he promised to remove fuel subsidies, address the fiscal imbalance and control Nigeria import dependent lifestyle. He said:
- “We will remove import and forex restrictions and insist on a single forex market. The current system penalizes exporters who bring in forex by forcing them to sell at a rate they cannot source for forex when they need to purchase forex.
- “This multiple exchange rate regime encourages capital flight and deters investment, and worsens Nigeria’s forex situation.
- “We must look beyond total dependence on oil. We will reduce the subsidy cost by over 50% with concomitant measures and counter-balance policies and programs to cushion the impact of the removal of oil subsidy.”
Tackling food inflation: Peter Obi said his administration would also prioritize food inflation by dealing with the insecurity situation in Northern Nigeria which has made it difficult for farmers to produce food.
- “The first thing to tackle is food inflation. Once we tackle insecurity and farmers return to farms, our food production will go up, and inflation will go down through reduced food prices. When you remove the subsidy, our fiscal imbalance will reduce and subsequently increase.”
Tackling unemployment: He also highlighted his plan to bring down the unemployment rate in the country to less than 20%. Part of the plan includes boosting Nigeria’s current $20 billion diaspora remittances to $40 billion and then $60 billion annually.
- “Although agriculture remains Nigeria’s largest and most important sector, employs 60% of Nigerians, and contributes an average of 24% to the nation’s GDP, presently Nigeria is incapable of feeding her population fully, talk less of exporting agricultural produce; expensive food importation has become the norm,” he said.
He added that there is a need to support modular refineries and local refining for domestic use and priced strictly in naira.
For the record: The exchange rate between the naira and the US dollar is around N800/$1. The exchange rate depreciated by 2.56% in contrast to N780/$1 recorded at the close of trading on Monday.
Nigeria’s inflation rate accelerated to a 17-year high of 21.09% in October 2022, marking a 0.32% point increase from 20.77% recorded in September.
Nigeria’s food inflation rate has risen by 23.72% on a year-on-year basis, marking a 5.39% increase compared to the rate recorded in October 2021 (18.34%).
