Tobias Sylvester
The People’s Democratic Party (PDP) Presidential candidate, Atiku Abubakar, believes that floating the naira can be a catalyst for boosting the nation’s slow economy.
During an interview with The Africa Report, published on Wednesday, the former vice president said it’s worth the risk to float the naira even if it results in inflation, noting that any side effect will be balanced out by attracting more inflow of foreign currency.
According to him, if elected president in the 2019 presidential election, he will float the naira and stabilize the exchange rate in order to attract more investors with incentives that’ll ultimately boost the economy. He said:
“I would prefer to float the naira because I believe that will bring about a more stable exchange rate. Therefore, foreign investors are more likely to return to Nigeria and invest as much as possible. We have to create more incentives for foreign investment and relax conditionalities, remove regulations as much as possible,”
When quizzed over how that kind of approach, especially in an import-dependent economy like Nigeria’s, would most likely drive up inflation, the presidential candidate said it can be balanced with the huge inflow of foreign currency.
“There could be devaluation and there could be a lot of inflow of foreign currency into the country. The devaluation that is likely to result can be balanced with the relatively huge (sums of) foreign currency that will be coming into the country.
“We had that situation prior to the departure of (former president) Goodluck Jonathan. At that time, we had a pile of foreign investment in the country, and there was the stability of the naira. So people did not have to go to the central bank to look for foreign exchange because there was a foreign exchange in the market and in the banks. So it could turn out to be a win-win situation.”
