by Busola Aro
Peter Obi, presidential candidate of the National Democratic Congress (NDC) for the 2027 election, says he will retain the free floating exchange rate policy of the Bola Tinubu administration if elected president.
A free-floating exchange rate occurs when a government allows the exchange rate to be determined purely by market forces and there is no attempt to ask the central bank to influence the external value of the exchange rate.
Obi spoke on Thursday during an interview on Arise TV when asked to name one policy of the Tinubu administration he would keep if he became president.
“Yes. One. It’s floated in naira. I’m not going to defend it, but I’m going to put productivity to make it more valuable to the people,” he said.
The Central Bank of Nigeria (CBN) introduced a “willing buyer, willing seller” model on June 14, 2023, in a major reform that unified the country’s multiple foreign exchange market segments.
The reform, introduced shortly after Tinubu assumed office, was aimed at allowing demand and supply to play a greater role in determining the value of the naira, while improving transparency and price discovery in the foreign exchange market.
CBN subsequently described the move as part of efforts to eliminate distortions arising from multiple exchange rate windows and improve investor confidence in the foreign exchange market.
The naira depreciated sharply following the reform, with the exchange rate at the investors’ and exporters’ window closing at N770.88 kobo per dollar at the end of June 2023, compared with N460 at the end of December 2022, according to CBN data.
On August 24, Obi said he supports the removal of petrol subsidy.
According to the presidential candidate, in his leadership blueprint for Nigeria, he had planned to remove the subsidy “in an organised manner,” such that whatever is recovered would be invested appropriately in the country for the benefits of the masses.