How Buhari’s Administration Failed To Protect Naira From Depreciation –Datti Baba- Ahmed

The Vice Presidential candidate of the Labour Party, Yusuf Datti Baba-Ahmed, has accused the Central Bank Of Nigeria under the Muhammadu Buhari led government of failure to protect the naira from devaluation.

Baba-Ahmed who hopes to displace the Ruling All Progressives Congress in 2023 alongside his new principal Peter Obi said from the onset, the CBN failed in its strategy to project the naira as a store of value.

Baba-Ahmed is an economist who founded Baze University, a privately owned university in Nigeria.

The naira has depreciated from an average of N197.8 in 2015 when Buhari took over office to N415.83 as of July, while black market rate slid from N224.83 per dollar to N620 in July.

Foreign investors, especially Foreign Portfolio Investors are scared of investing their funds in the country due to difficulty in getting their dollar in the event they wish to exit.

In 2020, foreign investors’ money trapped in the economy was over $2bn. Currently, over $450m of funds belonging to foreign airlines is trapped in the country.

Capital importation into Nigeria dropped from $23.99bn in 2019 to $6.7bn in 2021, over the foreign exchange scarcity faced in the economy.

Capital importation consists of three baskets which are foreign direct investment (FDI), foreign portfolio investment (FPI) and other investments.

“In 2015, they (Buhari’s administration) didn’t understand that in rescuing the Nigerian economy the first thing you have to do is to put a stop to the slide in the naira. Define naira correctly as officially appreciating currency. Use that to attract foreign currency into Nigeria,” Baba Ahmed told Arise Tv.

He added, “When foreign currency can come into Nigeria and stay safe, translated at the right exchange rate, foreign investors will enter.

“When naira is realised by companies, by individuals they do not need to rush to convert it for safety, you will now have a safe currency.”

Another failure of the government noted by the economist is the failure to improve power supply for Nigeria’s over 200 million people.

Baba- Ahmed revealed that his economic philosophy is liberalism.

He said capitalism and socialism are “relevant in economic history”, adding “now we’re talking about private sector philosophy being the engine of growth and public sector being the engine of regulation.

“Privatisation is almost over. It is a matter of individuals establishing refineries and thank God you have an individual who is making it; fertilizer plants, airlines.

“In my own kind of case a university or two. We (private sector) spend money better than when the government does. That is the philosophy, no longer capitalism or socialism.”