My latest piece for Financial Nigeria is here.
It’s about President Tinubu’s removal of the petrol subsidy and devaluation of the naira, which I support and indeed advocated for before they happened. I also believe both events would have happened regardless of whether Bola Tinubu, Atiku Abubakar, or Peter Obi was sworn in on 29 May. The only candidate that would have kept them in place would have been Rabiu Kwankwaso, but he was not in the running to be the announced winner of the elections by any stretch of the imagination.
Having said this, I have a major quarrel with how Bola Tinubu has implemented both. This is what I talk about in the piece. You see, removing the subsidy is fine, but removing it as an event without a plan is not, and the productivity dip and the sharp uptick in food inflation that we have seen bear witness to that.
Just as importantly, announcing a float of the naira without a) having a substantive CBN governor in place and b) maintaining foreign currency restrictions for 43 items is a blatant lie that the market can see through, and given that Nigeria’s productivity has not quite improved, means we will not have stuff to sell to the world, meaning no dollars coming in, which means that the official and parallel rates will at some point down the road, again start to diverge.
We may just be watching a masterclass on how to waste a crisis…