Peter Obi plans to float the naira and fight inflation


Labor Party (LP) presidential candidate Peter Obi has declared that he would abandon the multiple exchange rate regime and reduce the rate of inflation in Nigeria.

This was revealed through a Twitter post where he listed some of the things he would do for the country if he were elected president in 2023.

He indicated that the multiple exchange rate regime, which encourages capital flight and discourages investment, has worsened the country’s exchange situation.

Focus on Obi’s plan: To tackle inflation, he vowed to remove fuel subsidies, address the fiscal imbalance and curb Nigeria’s import-dependent lifestyle. He said:

  • “We will remove import and currency restrictions and insist on a single foreign exchange market. The current system penalizes exporters who bring in foreign currency by forcing them to sell at a rate they cannot obtain for foreign currency when they need to buy foreign currency.
  • “This multiple exchange rate regime encourages capital flight and discourages investment, and worsens Nigeria’s exchange situation.
  • “We must look beyond total dependence on oil. We will reduce the cost of the subsidy by more than 50% with concomitant measures and counterbalancing policies and programs to cushion the impact of removing the oil subsidy.”

Address food inflation: Peter Obi said his administration would also prioritize food inflation when tackling the insecurity situation in northern Nigeria, which has made it difficult for farmers to produce food.

The news continues after this announcement.

  • “The first thing to address is food inflation. Once we address insecurity and farmers return to the farms, our food production will increase and inflation will decrease due to lower food prices. When they eliminate the subsidy, our fiscal imbalance will be reduced and then it will increase”.

Address unemployment: He also highlighted his plan to reduce the unemployment rate in the country to less than 20%. Part of the plan includes increasing the current $20 billion diaspora remittances from Nigeria to $40 billion and then $60 billion annually.

  • “Although agriculture remains Nigeria’s largest and most important sector, employing 60% of Nigerians and contributing an average of 24% to the nation’s GDP, Nigeria is currently unable to fully feed its population, let alone export agricultural products; the importation of expensive food 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.

The news continues after this announcement.

For the record: The exchange rate between the naira and the US dollar is around N800/$1. The exchange rate depreciated 2.56% compared to the N780/$1 registered at the close of business on Monday.

Nigeria’s inflation rate accelerated to a 17-year high of 21.09% in October 2022, an increase of 0.32% from 20.77% in September.

Nigeria’s food inflation rate has increased by 23.72% YoY, which is an increase of 5.39% compared to the rate recorded in October 2021 (18.34%).


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