The residential candidate of the Peoples Democratic Party, Atiku Abubakar, has said he would be willing to risk plunging Nigeria’s economy into inflation in order to guarantee inflow of foreign investments.

Mr Abubakar, a former vice president, said he would float the naira, so as to allow free market determine the value of the national currency, a controversial position that stands in sharp contrast to the belief of President Muhammadu Buhari.

“I would prefer to float the naira because I believe that will bring about a more stable exchange rate,” Mr Abubakar told The Africa Report in recent interview. “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. But what you forget, it has two side effects,” he said.

When challenged that the policy could worsen Nigeria’s inflation rate, which stood at 11.3 percent in September after averaging 16.5 percent in 2017, Mr Abubakar said the foreign currency that potential investors would pump into Nigeria would be enough to cushion the imminent crisis of inflation on Nigerians.

“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 stability of the naira. So people did not have to go to the central bank to look for foreign exchange because there was foreign exchange in the market and in the banks. So it could turn out to be a win-win situation,” he said.

The policy the candidate is proposing could send commodity prices through the roof in an import-dependent economy like Nigeria.

But it conforms with his longstanding position that Nigeria’s economy should be guided by free market principles.

Currently, the country’s manufacturing sector has been widely deemed moribund by industrialists and economists. Mr Abubakar’s proposal, which he said was successful when tried before, did not seem to fathom what would become of Nigeria’s economy in the transition period between foreign investments and and growth.



“There is no amount of foreign foreign investment that would drive down inflation,” Enobong Udoh, an economist, told PREMIUM TIMES Thursday morning.

Mr Udoh said the problem with Nigeria’s inflation has more to do with the monetary policies of the Central Bank of Nigeria, some of which a president might not be able to control to avoid being seen as compromising the independence of the institution.

“People emphasise too much on fiscal policy and not the monetary policy, which is actually the problem,” Mr Udoh said. “If you are having interest rate of over 25 percent, it is not good, and you cannot use foreign investments to drive down its immediate impact.”

Mr Udoh said Nigeria’s real inflation rate is over 25 percent, casting strong doubts over the 12 percent which the statistics office is reporting.

“Inflation is about 25 percent right now,” Mr Udoh said. “Banks are giving out loans at about 25 percent and they try to make two or three percent interest on each loan.”

He suggested a reshuffling of top management officials at CBN as way to drive down lending rates.

“The guys at the CBN are in charge of monetary policy, but they do not know what they are doing,” he said. “they are not doing well at all and they should be removed urgently before we could have a sensible economy.”

Mr Buhari strongly rejected calls to float the naira between 2015 and 2016, although he eventually yielded to calls to devalue when it became clear that the CBN could no longer defend the national currency.

Mr Abubakar’s comments to The Africa Report, which come four days to the formal opening of presidential campaign, have also elicited critical reviews by commentators in the ruling All Progressives Congress.

Mr Abubakar “is clearly proposing a suicidal economic plan for Nigeria,” Ayo Akanji, an APC strategist, told PREMIUM TIMES. “Nigerians can now begin to see that they risk voting in a man who lacks basic understanding of macroeconomics.”



“This is a voodoo and crooked economic policy that he might have used in his private businesses and assumed would work for Nigeria,” Mr Akanji said.

“Nigerians should now compare this dangerous proposal with how the Buhari administration has been implementing a holistic home-grown solution to our economic problems, which has been working for us as evident in gradual and sustainable uptick in the country’s economic activities,” the strategist said.

By Samuel Ogundipe
Source : https://www.premiumtimesng.com/business/business-news/295841-ill-risk-inflation-to-win-huge-foreign-investments-atiku.html

No risk no gain. Atiku economically sound than the lifeless one in aso rock

economic experts should comment not political fanatics.

There is no need to even risk inflation to immediately improve FDI, ousting Buhari alone will improve FDI prospect by over 100 percent in 2 weeks

See the person that wants to rule us, that would be an economic suicide Mr. Atiku

See all the complex analysis Atiku is making, showing someone with a knowledge of economics.

The only thing Buhari knows and thinks is corruption this, corruption that..

Oya fight the corruption na, He's telling us that a consensus corrupt individual is responsible.

Oga Buhari is done.. he should go and rest, let capable hands handle the country.

Kai to Lifeless FC

Ignorance is truly a female dog

quickberry:
See the person that wants to rule us, that would be an economic suicide Mr. Atiku

Let me hear how the good for nothing ignoramuses support and defend this.

xtravanganza:
economic experts should comment not political fanatics.

Mmmmmh..... Atiku is mixing up alot of issues.

What assurance do we have that these foreign investors will plough their profits back into our economy?Capital flight is a major problem facing our economy.
Atiku presidency will seriously set this country back.

dat9jaguy:
What assurance do we have that these foreign investors will plough their profits back into our economy?Capital flight is a major problem facing our economy.
Atiku presidency will seriously set this country back.

I just pity non economist who would not see what you are seeing.

Foreign Investment and capital is hot money which is highly volatile and unstable.

Atleast he understands economic terminologies and he is articulating his position. It shows he is a potential president with an above average economic understanding thereby can engage in a robust economic debate and see and understand different economic standpoints and view points.

brainwashed atiku fulani slaves are already rejoicing over the jargons he just said.
..


the first thing buhari did when he came was float naira/dollar which made dollar went as high as 500 and inflation reached all time high... the same brainwashed mor0ns wailed about how buhari is killing them with hunger.

now these same mor0ns are praising atiku for planning to implement the same thing... now they wonder why no one takes them seriously.



i'm guessing atiku wants to double all his laundered dollars and the ones in his soak away by doubling or trippling exchange rate.. That thief must never be allowed anywhere near aso rock. He will risk the lives of nigerians for selfish gains.

Omg!
This guy just wants to ruin the very fragile Nigerian economy by this singular action.
You can't float when the economy is still almost totally import dependent. Boost local production and export of certain goods that consume most of our fx, and then you initiate a float.

You can only attract short-term investors with a float. The same short-term investors will eventually take their money out when election comes because they don't trust the democratic stability of Nigeria and many African countries yet.

Build infrastructure and long-term investors will come in and set up industries in Nigeria. We have a huge market already.

xtravanganza:
economic experts should comment not political fanatics.

I'm an engineer by profession but I know some political economics.
Floating simply means allowing market forces to determine the actual value of the naira.
Floating the naira now is a dangerous step to take. This will take the exchange rate to close to $1 = N1000. Inflation will definitely triple. That means a bag of rice will be 50k.

High oil price is what gives the naira value as most of our foreign earnings come from oil and gas sales.

Nigeria needs to gradually diversify its economy away from oil and reduce its imports especially on items that consume our foreign reserve the most like petroleum products, rice, wheat and steel.

In summary, produce these items locally and possibly export them (after which we can then float the naira), so that the strength of the naira can rely on other things apart from oil.

This govt has previously said it plans to float the naira by 2022 based on its target of producing those 4 items locally by then.

As an example, Egypt relies less on oil than Nigeria. They floated their currency last year and the exchange rate went from 1USD = 9 EGP to 1USD = 18 EGP. That's a 100% loss of value with its attendant inflation.

thief atiku want to take the jobless aggressive lazy idiotic pigs back to trial and error era.

MeanChris:
See all the complex analysis Atiku is making, showing someone with a knowledge of economics.

The only thing Buhari knows and thinks is corruption this, corruption that..

Oya fight the corruption na, He's telling us that a consensus corrupt individual is responsible.

Oga Buhari is done.. he should go and rest, let capable hands handle the country.

Kai to Lifeless FC

you don't even know what you are saying ,
And you don't even know that thief atiku score an own goal.

Smile

An average Nigerian will scream bloody murder when Atiku implements this. The value of naira to the dollar will dramatically rise, probably north of 700 Naira to a dollar and prices of everything will increase immediately.

While it seems like a reasonable economic policy. Nigerians are absolutely not ready for it.

If you are complaining about prices now








I swear wait till Atiku wins and floats the naira




The same Atiku wants to further subsidize the prices of petroleum products while giving ND 100% control over their crude oil revenue, which happens to be 70% of the government revenue


Voodoo Economics




Worst part is It wouldn't lead to investment because of underlining issues like poor infrastructure and corruption.

kahal29:


I just pity non economist who would not see what you are seeing.

Foreign Investment and capital is hot money which is highly volatile and unstable.

Where is the "foreign money" coming from when American reserve bank is about raise interest rate.

quickberry:
See the person that wants to rule us, that would be an economic suicide Mr. Atiku

U ve said nothing.

Liberal mind helps harness better opportunities

The way you risk privatization to your own gains. Useless politician

That's why he has a strong financial guru on his side for a VP.
Your believe that he is going to drive this nation backwards is very wrong and untrue.
I believe he will build a better and strong financial team to grow this nation just as he did back then by bringing Ngozi back to Nigeria.
No can investors come into a learned nation like Nigeria and just abscond with our wealth under Atiku unlike the Buhari administration that is compromising with MTN after looting us.

dat9jaguy:
What assurance do we have that these foreign investors will plough their profits back into our economy?Capital flight is a major problem facing our economy.
Atiku presidency will seriously set this country back.

My mind is just telling me that Atiku is d man we have all been waiting for.A God sent Messiah

APC is not sharp enough to understand such kind of brilliance/knowledge he, (Atiku) is emitting.

kahal29:


Mmmmmh..... Atiku is mixing up alot of issues.

Is America the only wealth creating nation on the planet?
Be sensible.

Iamgrey5:
Where is the "foreign money" coming from when American reserve bank is about raise interest rate.