Financial expert Dr. Olutayo Obadina has said that it is not the removal of fuel subsidy that is the cause of the hardships currently being faced by Nigerians, but the fluctuation of the naira by the government.
Obadina, a PhD candidate in credit and financial management, said this at a press conference in Lagos on Friday.
In his lecture entitled “The Mathematics of Fuel Subsidies: A Critical Look at Nigeria's Problems and Solutions Today,” Mr. Obadina said that the key to lowering fuel prices and easing inflation is not the return of fuel subsidies, but the stabilization of the Naira. He claimed that there was.
According to Obadina, the federal government should focus on reducing Nigeria’s import dependence by promoting exports which will stabilize the naira.
He recommended lowering the Naira-to-Dollar exchange rate from the current 1,600 Naira/$1 to around 460 Naira/$1, believing that this would significantly reduce fuel prices to about 450 Naira per liter. There is.
The real problem and its solution
Obadina stressed that the current economic woes are not a direct result of the removal of fuel subsidy, but rather the consistent devaluation of the Naira, stating:
“The real problem is the devaluation of the naira.While the dollar cost of fuel imports has been relatively stable for many years, the naira continues to depreciate.
“Strengthening the naira is the only sustainable solution to Nigeria’s economic problems.”
Obadina also criticized the Naira floating policy, arguing that it would only worsen the country’s economic woes. They called on President Bola Tinubu to reverse this policy and return to a fixed exchange rate, which would help stabilize fuel prices and curb inflation. Mr. Obadina said it was important to promote Nigeria’s exports to increase the supply of dollars in the economy. He proposed that a society be established.“The Central Bank of Nigeria (CBN) must decide the amount of dollars needed to stabilize the naira.
“The President, with support from the Department of Commerce, should work with the 36 states and the Federal Capital Territory to achieve export targets,” he suggested.
He added that these state marketing boards should initially be government-led, but should be gradually transitioned to private sector ownership, with the public acquiring 51% of the shares within three years.
This would prevent the commission from becoming another government bureaucracy and ensure its effectiveness in promoting exports.
Leveraging Nigeria’s healthcare sector for exports
Mr. Obadina suggested that in addition to traditional exports, Nigeria should leverage on its medical sector by encouraging the export of doctors and medical professionals.
He argued that with many Nigerian doctors seeking opportunities abroad, Nigeria could benefit by overseeing exports and ensuring remittances are repatriated.
“Two out of three doctors produced in Nigeria want to work abroad. Government should control exports to maximize remittances and strengthen the economy,” he said. .
Obadina also stressed the need for increased investment in domestic agriculture to address food insecurity in Nigeria, encouraging Nigerians to invest in agriculture as a means of achieving food security and reducing dependence on imported food. called out.
What you need to know: Within the past 10 months, the value of the Nigerian Naira has fallen by more than 82%. Moved from N896 in January to N1635 in mid-October.
The devaluation of the Naira is a result of the floating exchange rate policy implemented by President Tinubu after taking office in May 2023.
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