Since the development, the FX market has continued to
witness high levels of volatility, resulting in a further widening of the gap
between the parallel and official rates.
The policy also worsened inflation in the country, evidenced
by the skyrocketing prices of goods and services.
Speaking in a chat with TheCable on Wednesday, Sagay said
the federal government should have been more circumspect in applying the
recommendations of the World Bank and International Monetary Fund (IMF) on
naira float and petrol subsidy removal.
“I am not an
economist but I strongly believe that if the Tinubu administration had allowed
local production of petrol to kick in before removing fuel subsidy, we wouldn’t
have this crisis. My view is that the problem we are having today is related to
fuel subsidy removal without first keying in local production and the floating
of the naira,” he said.
The former chairman of the presidential advisory committee
against corruption (PACAC) said IMF and World Bank recommendations are rarely
adopted by developed nations.
“The IMF and World Bank are imposing their principles on us
even though they themselves don’t apply it. In England, you have a National
Health Service for the citizens who hardly pay anything. But here, they want us
to pay for everything,” he said.
“The last time I was in the US, I wanted to use public
transport. I never paid the full bus fare. My rate was subsidised because of my
age. These are subsidy countries trying to eliminate subsidy from our own
country. Every country the IMF and World Bank have visited and imposed their
standards on, their economies have collapsed.
“So, our government
needs to look at the very rigid ways they are applying IMF and World Bank
prescriptions without changing them to suit our personal circumstances.
“There is no question about floating an already weak
currency. The naira is a very weak currency. Why should you float it? You know
that it is going to drop to the bottom of the ocean. Why should you float it?
This government needs to scrap the idea of the naira float immediately. They
need to cancel the idea of floating. They should take over the currency and
back it up with every conceivable asset and steady it.
“They should also take over all locally produced petrol and
discharge it into the market. This will bring down the cost.”
Also commenting on the issue, Tope Fasua, special adviser to
the president on economic affairs (VP office), said the floating of the naira contributed
to the rising cost of living.
“The economy is too
fragile for that. The naira float made prices go up everywhere,” he said.
Fasua also commended the federal government for steps being
taken to address the free fall of the naira, especially the ban on crypto and
Binance.
“In less than two
hours that the FG banned crypto and Binance, dollar dropped from N1850 to
N1390. I pray this is sustainable,” he said.
