Nigerian Presidential Candidate Says Fixed Exchange Rate Regime ‘Must End’ – Calls for Success with Fintech Unicorn Flutterwave – Featured Bitcoin News
A Nigerian presidential candidate, Peter Obi, has said that the local currency’s exchange rate against the dollar must not be fixed, but must be determined “by the forces of supply and demand”. Pointing to the success of Nigerian fintech Flutterwave, the candidate said if elected, his government will create an enabling environment for other startups to thrive and succeed in the same way.
Two-tier exchange rate regime under attack
A candidate in Nigeria’s upcoming presidential election, Peter Obi, has said the local currency’s official exchange rate – currently pegged at just under N450 to every dollar – must be determined by market forces. Obi, who is one of three main candidates seeking to replace outgoing President Muhammadu Buhari, also attacked the two-tier exchange rate regime in place.
The statements by the Labor Party candidate come just over a month after the naira plunged to its worst ever rate against the US dollar. As reported by Bitcoin.com News in late July, the naira had hit an all-time low of N710 to every dollar. In response to the naira’s then rapid depreciation, the Central Bank of Nigeria (CBN), which last devalued the naira in May 2021, blamed speculators.
Immediately following the CBN’s allegations, Nigeria’s anti-corruption body, the Economic and Financial Crimes Commission (EFCC) swooped on foreign exchange dealers and exchange offices in and around the Wuse Zone 4 area of Abuja. The EFCC’s raid on currency speculators initially appeared to trigger the naira’s recovery. However, more than a month later, the naira exchange rate had returned to above N700 per dollar.
“A contractionary monetary policy” envisioned
On a Twitter thread outlining his plans for the country should he win the presidency, Obi proposed a solution which he said could end the woes of the naira. He explained:
The truth is that for a long time market forces have not determined the course of the naira. The dual currency regime is a stroke of luck. It has to end. Let the exchange rate be determined by the forces of supply and demand. It’s that simple.
As well as abandoning the fixed exchange rate system, the Labor candidate said when he was elected, he would not fight inflation by using price and wage controls. Instead, it will “pursue a contractionary monetary policy.”
Meanwhile, on the same thread, Obi also claimed Nigerian fintech startup Flutterwave, which has since become a billion dollar company. To ensure that more startups succeed in the same way, Obi said his government “will create an enabling environment for our startups to thrive.” This will be done by enforcing a legal framework that protects both “foreign investors and their indigenous partners”.
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