- A financial expert attributes Nigeria’s ongoing economic difficulties to the hasty devaluation of the naira following the removal of fuel subsidies
- The expert suggests that a more measured approach could have been taken to assess potential savings and minimize hardships
A financial expert has identified the rapid devaluation of the Nigerian naira as a primary cause of the country’s ongoing economic challenges and hardships. The expert suggests that the government’s decision to devalue the currency immediately after the removal of fuel subsidies was hasty, contributing to the prevailing difficulties.
The Managing Director/Chief Executive of ID-PETRUS Consult Limited, Idoga Anyebe, expressed his views during an interview in Abuja. He highlighted that the removal of fuel subsidies occurred sooner than anticipated, catching many by surprise.
Many had expected President Bola Ahmed Tinubu to take the time to thoroughly evaluate the economy after his inauguration on May 29 before making any policy changes. Anyebe pointed out that the President’s policy statement on May 29 led to rapid increases in fuel prices and a host of associated problems.
The expert suggested that the situation could have been better managed, particularly as the government was already preparing to remove the fuel subsidy in July. Anyebe believes that the hasty devaluation of the naira played a significant role in the current hardships.
Speaking about the ongoing difficulties, particularly related to the affordability of essential food items, Anyebe stressed that unless the naira appreciates, the standard of living in the country will continue to deteriorate. He explained that the people generally welcomed the subsidy removal due to the perceived corruption associated with it.
However, Anyebe proposed that the government could have studied the subsidy removal to assess potential savings, maintaining the existing monetary policy until the appointment of a substantive Central Bank of Nigeria (CBN) governor. Instead, they proceeded to devalue the naira.
In the expert’s view, the devaluation of the naira has complicated the current economic situation, and the CBN governor will play a crucial role in addressing these challenges.