For the first time in our history, the Central Bank of Nigeria (CBN) reported that the British Pound crossed the N1,000 mark. Precisely, one British pound was traded at approximately N1,009 on Friday. Some see this as the success of President Bola Tinubu’s naira float policy. This group of people argue that the CBN is not meddling with or manipulating the foreign exchange market, which is considered to be progress.
The second group of people say this is bad; they argue Tinubu’s policy is worse than what was obtainable under Buhari, and they have evidence or data to support that. They say the naira has never been quoted this low on the official side of the forex market. They exclaim that the naira is literally at its weakest point in 50 years! To add perjury to injury, they ask if we have seen the country’s foreign reserves since the naira float.
Yes, the reserves have fallen from $35 billion to $34 billion since the float — suggesting that the inflow of forex is not so great. This school of thought colour the data to tell certain stories.
However, I belong to a third school of thought, the one that believes that the policies are incomplete without key drivers. Last week, I argued that Tinubu needed to name his cabinet as soon as possible to keep the progress his administration has made on the economic side. I concluded that the failure to do so could effectively mean losing the investors’ confidence he so clearly craves.
I asked at the time where investors should look for insight on monetary policy; is it to Wale Edun, the president’s special adviser on monetary policy, or to Folahsodun Shonubi, the acting CBN governor? Both men are either media shy or playing by the same set of rules; they have both avoided the media since the naira float. Hence, nobody can claim to understand what direction their policy advisory or action will face.
Yesterday, I tweeted that I was the only one on Obasanjo’s internet who had not seen the list of Tinubu’s ministers. Everyone else seems to be unto something. And as it is in nature, nature abhors a vacuum. The fake news peddlers have gone to work, appointing ministers for Tinubu. I have seen a few lists, but I expect more to come. It’s how disinformation works.
TINUBU LOOKING AT BUHARI’S BAR?
On the day he was sworn in as president, Tinubu made quick and bold policy pronouncements. He ended Nigeria’s 46-year-old fuel subsidies. Days later, he suspended the CBN governor and pushed for the unification of the exchange rate system. He suspended the chairman of the Economic and Financial Crimes Commission (EFCC). You know the rest.
Reuters asked if he was Baba Go-fast in contrast to Buhari, who was dubbed Baba Go-slow, for taking six months to appoint ministers. Buhari’s lack of speed necessitated the constitutional amendment, which mandates the president to name his cabinet in 60 days or less from inauguration.
It’s day 43 in the life of the Tinubu administration, and there are no ministers yet. While Tinubu is within his rights to hold out for another 17 days and still be better than Buhari was, this delay does not fit into the mould of the president Nigerians are expecting at this critical time. To put it mildly, the immediate-past president set the bar really low, and Tinubu should not be looking at Buhari’s bar.
In a fate-like fashion, Tinubu was elected ECOWAS chair earlier in the week, making him the fastest Nigerian president to be so elected. He became chair of the regional body about 40 days after his inauguration. Anyone who became ECOWAS chair earlier than 40 days simply inherited it from their predecessor. Baba Go-fast went fast in clinching ECOWAS’ top spot.
WHY DOES TINUBU NEED TO GO FAST?
I’d end my musings where I started, with the currency. Schools of thought A and B made strong arguments on what has been the fate of Tinubu’s naira float policy, but as the third school, I look at the numbers.
According to FMDQ numbers, the turnover in the forex market is dropping. About a week ago, the amount of forex traded at the I&E window went as high as $263 million in a single day. That figure dropped to $97 million on Monday. While $97 million is still a lot compared to historical records, it is beginning to look average in the post-float economy.
Investors and exporters are now gradually holding their cards to their chests and watching what the government does next. Google Trends this week has also shown that the biggest search term associated with the name Tinubu is “ministerial list”. Of the top 25 queries, two are about ECOWAS, two about Peter Obi, and 21 about Tinubu’s ministers. The top 18 queries are all about the cabinet.
As far as ministerial positions are concerned, the people and the markets are aligned on one ask: Is Baba Go-Fast deciding to go slow?