President Bola Tinubu said, on Sunday, that Nigeria would have gone bankrupt if his administration had not discontinued fuel subsidy payments.

He said though the policy came with economic pains, it was in the best interest of Nigerians.

Tinubu spoke at the Special World Economic Forum in Riyadh, Saudi Arabia.

Upon assuming office last May, Tinubu implemented the discontinuance of subsidies on petrol as prescribed by the immediate past administration of Muhammadu Buhari.

He said the move would save the government money for infrastructural expansion.

However, this move sparked collateral instability in the value of the Naira and heaped hardship on Nigerians as food prices soared.

At the WEF, Tinubu argued that removing the petrol subsidy was a “necessary action for my country not to go bankrupt” and to “reset the economy towards growth.”

Acknowledging the difficulties posed by the decision, the Nigerian leader told attendees that his government implemented parallel arrangements to cushion the impact on vulnerable citizens.

“Yes, there have been drawbacks. Yes, there was the expectation that a greater number of people would feel the difficulty, but, of course, I believed it was their interest that was the focus of government.

“It is easier to manage and explain the difficulties, but along the line, there was a parallel arrangement to cushion the effect of the subsidy removal on the vulnerable population of the country.

“We shared the pain across the board. We cannot but include those who are very vulnerable. Luckily, we have a very vibrant youthful population interested in discoveries by themselves, highly ready for technology, good education, and committed to growth,” Tinubu explained.

He also described the unification of the naira exchange rates as “necessary” to “remove the artificial element of value in our currency.”

The move, he argued, enabled the local currency to find its level, “compete with the rest of the world’s currencies, and remove arbitrage, corruption and opaqueness.”

Tinubu also emphasised the need for stability and economic prosperity in West Africa, saying, “We need to trade with one another, not fight each other.

“It is very, very necessary and compulsory for us to engender growth, stability, and economic prosperity for our people.”

Tinubu on Sunday made a clarion call to “pay attention” to the root causes of poverty and instability in Africa’s Sahel region.

Tinubu also argued that achieving regional stability and growth will only happen through sustained economic collaboration and inclusiveness.

“The rest of the world needs to look at the fundamentals of the problem; not just ordinary geopolitically, but it has to go to the root.

“Has the world paid attention to the poverty level of Sahel and the rest of ECOWAS?

“Have they helped the infusion of capital and paid adequate attention to the exploitation and opportunities availed by the mineral resources available?” Tinubu queried when he fielded questions during a panel session at the Special World Economic Forum in Riyadh, Saudi Arabia.

While calling on bigger economies to actively participate in the promotion and prosperity of the region, he urged global collaboration and inclusiveness to drive capital formation and economic opportunities in Africa.

He recounted the efforts made in his past 10 months as Chairman of the ECOWAS Authority of Heads of State and Government and how he has used Nigeria’s influence to discourage unconstitutional changes in government and ease sanctions for improved trade and economic prosperity in the region.

Tinubu singled out “the fear of lack of capital in Africa” and “stigmatisation” for urgent attention through inclusive programmes that drive economic opportunity.

He emphasised the importance of economic collaboration, saying, “The capital formation necessary to drive the economy, like agriculture, food security, innovation, and technological advancement, must be an inclusive programme of the entire world. No one should be left behind.”

Over 1,000 leaders from business, government, and academia from more than 90 countries are attending the high-profile forum in Riyadh, which is expected to address pressing global challenges across three core themes: revitalising global collaboration, fostering inclusive growth, and catalysing action on energy for development.

The naira has demonstrated signs of strengthening against the United States dollar, appreciating by N125 to reach N1,275/$1 over the weekend.

The new rate represents a 9.8 per cent increase when compared to N1,400 to a dollar it traded at the close of trading activity on Friday.

This came as the Senate through its Committee on Finance called for concerted efforts by all relevant stakeholders to rescue and sustain its stability.

The senate said there was an urgent need for concerted efforts to tackle the instability and continuous depreciation of the Naira.

Currency traders at the popular Wuse Zone 4 market, who spoke with one of our correspondents on Sunday, blamed trading uncertainty of the market as reason for the fluctuations in the exchange rate.

They added that the government must either to choose to increase the currency value or devalue for market stability.

The operators did not provide a selling rate for Sunday, citing the absence of trading activity.

A trader, Malam Yahu Ibrahim, said operators were taking too much risk trading the naira due to its instability.

He said, “We take risks against ourselves every day because I don’t know how they are doing it, the naira is just swinging. “If the government wants to bring down the dollar totally, they should do it or if they want the naira to fall, they should do it and not allow it to fluctuate. It is killing businesses.”

“We are not even seeing the effect of the CBN dollar sale to BDCs, we are not seeing any effect.”

Another trader, Abubakar Taura, had in an earlier interview, expressed caution in trading activity, citing ongoing concerns that the CBN might take some drastic measures to stabilise the naira.

He noted that they couldn’t guarantee or predict what the rate would be on Monday (today) due to the volatile nature of the market.

The recovery in value coincides with plans by the Association of Bureaux De Change Operators of Nigeria to unify the retail end of the foreign currency market.

ABCON President, Aminu Gwadabe, said the move would tackle volatility and boost regulatory compliance within that segment of the market.

He said, “Part of our vision for a united retail-end forex market includes activating geo-mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps. This will enable forex buyers to easily locate BDCs offices for effective and seamless transactions.”

Before the marginal gain, the naira had lost 26.2 per cent in two weeks when compared to N1,125 per dollar quoted on April 12, 2023, on the parallel market, popularly called the black market.

Last Monday, the Central Bank of Nigeria approved the allocation of $15.83m  to 1,583 BDC operators to enhance liquidity in the unofficial market.

Meanwhile, data from FMDQ securities exchange showed that the naira continued its downward trend against the greenback at the official foreign exchange window, closing at N1,339/$ on Friday.

This represents a 2.24 per cent depreciation when compared to the N1,309/$ quoted on Thursday, highlighting a full week of depreciation at the official market.

Trading between willing buyers and sellers reached a total of $1bn at the Nigerian Autonomous Foreign Exchange Market.

Senate reacts

Meanwhile, worried by another round of naira depreciation at the forex market, the Senate through its Committee on Finance, called for concerted efforts by all relevant stakeholders to rescue and sustain its stability.

In a statement issued on Sunday, the Chairman of the Committee, Senator Sani Musa ( APC Niger East), said there was an urgent need for concerted efforts at tackling the instability and continuous depreciation of the Naira.

He said, “The recent depreciation of the Naira underscores the need for proactive measures to safeguard the stability and resilience of our currency.

The Nigerian economy is facing significant challenges, exacerbated by both internal and external factors.

“Despite efforts to stabilize and bolster economic growth, the numerous initiatives and bold but necessary steps and policy decisions taken by President Bola Tinubu, the persistent depreciation of the Naira against major foreign currencies has become a pressing concern.”

“The recent depreciation of the Naira underscores the need for proactive measures to safeguard the stability and resilience of our currency,” the Senate finance chairman lamented.

Senator Musa added, “The Senate Committee on Finance is closely monitoring the situation and is committed to working collaboratively with relevant stakeholders to implement effective policies and strategies.

“It is imperative that we address the root causes of Naira depreciation, including but not limited to fluctuations in global oil prices, fiscal deficits, and structural imbalances in the economy.

“The Senate Committee on Finance is exploring a range of policy options to mitigate the impact of Naira depreciation and foster economic stability.”

“This includes robust oversight of fiscal policies, engagement with key stakeholders, and the formulation of targeted interventions to support key sectors of the economy.

“It is also the hope of the committee that our economic managers will adhere strictly to the norms and standards set by this administration to ensure that we achieve the desired outcomes in taking Nigeria to its economic growth and prosperity.

“As we navigate these uncertain times, I urge all Nigerians to remain vigilant and resilient. Together, we can overcome the challenges facing our economy and chart a path towards prosperity for all” (PUNCH)