By Michael Chibuzo
On February 25, 2024, serial presidential candidate, Atiku Abubakar jumped on a Reuters article that cast a positive light on Argentina’s new president, Javier Milei and his austerity economic programme, which led to a slowing down of Argentina’s monthly inflation rate. Atiku was quick to hail President Milei of Argentina for whatever it is that was happening in the Argentinean economy and derived special joy knocking Nigeria’s President, Bola Tinubu, rather ignorantly I must say.
Atiku Abubakar openly said he was attracted to the reforms in Argentina because Javier Milei’s stabilisation plan bears resemblance to his “Recover Nigeria Plan”. About 47 days later, Argentina annual inflation has further increased to 290%, its currency, the Peso has further depreciated to 864 to the US dollar, cost of commodities are still rising steeply, and further subsidy removal is still in the offing.
Unfortunately for Atiku Abubakar and other naysayers hiding both in plain sight and under the cover of economic analysts, the Nigerian economy as a whole has turned the corner, the head winds that accompanied the necessary monetary and fiscal changes put in place by the Tinubu administration have now quietened. The Naira particularly is now undergoing a massive renaissance of some sorts literally.
Atiku was quick to accuse President Tinubu of incompetence when the dynamics of market forces were still at its infancy and the Naira was trying to respond to far reaching reforms instituted by the CBN Governor, Dr. Yemi Cardoso and his team. The Naira appeared to be on a free fall, many were actively speculating on the Naira and platforms like Binance allowed itself to be used to manipulate the exchange rate. Bitter opposition supporters prayed for the collapse of the Naira. Even some progressives show signs of pessimism.
Today, the Naira is the best performing currency in the world and is rebounding at an unbelievable rate. The Naira traded at N1,142.38 to the dollar on Friday in the FMDQ Exchange. In fact Goldman Sachs in its latest report has predicted that the Naira may exchange below below N1,000 to the dollar in the coming months. This is very much achievable in a matter of weeks if the present bullish trend of the Naira continues.
The exciting part of the Naira resurgence is that the Naira exchanges at a higher rate in the official market when compared to the parallel market rate. This singular reality, made possible by multiple checkpoints mounted by Cardoso across the financial landscape has extinguished any remaining incentive for round-tripping and arbitrage in the forex market. This means artificially induced excess demand has all but disappeared.
In all these, Atiku Abubakar has deliberately shied away from commending President Bola Tinubu and the managers of the Nigerian economy. It is possible that Atiku may be sad that the Naira is stabilising and voted the best performing currency in March. He would have wrote another ignorant epistle if the Naira was voted as the worst performing currency. Atiku simply moved on to another topic quietly. Argentina is no longer a model of comparison for Atiku Abubakar.
A NEW NIGERIA RISING
For those who truly want to see the gradual emergence of an economic behemoth called Nigeria, these are very promising times. The structural reforms of the Tinubu administration have laid a solid super structure for Nigeria’s long overdue economic transformation. Apart from the highly successful Cardoso chess game with the Naira, the fiscal authorities led by the Finance Minister, Wale Edun have also been erecting strong pillars that will support the needed massive growth. Revenue remittances from MDAs and government enterprises into federal government coffers have tripled since the beginning of the year.
First published by Podium Reporters.com
