Tinubu Vows To Clear FX Backlog, Says $1tn Economy Feasible By 2026

President Bola Tinubu on Monday promised to clear the backlog of all futures and forward foreign exchange (FX) contracts which have continued to negatively impact investor confidence in the economy.

The pronouncement by the President came as a huge sign of relief for both domestic and international investors who had often blamed the current macroeconomic challenges largely on the liquidity constraints in the FX market.

The trio spoke at the opening of the 29th Nigerian Economic Summit (NES#29), with the theme: “Pathways to Sustainable Economic Transformation and Inclusion”.

However, on the same day, the naira sustained its slide against the US dollar on the parallel market as it weakened further to an all-time low of N1,210/$1 on Monday, compared to the N1170/$ it was at the  weekend.

On the other hand, on the official Investors and Exporters (I&E) FX Window, the naira appreciated to N793.34/$, stronger than the N808.27 /$ it closed on Friday. However, intra-day trade from the data obtained by FMDQ showed that the highest spot rate exchanged at N900/$1 while the lowest spot rate recorded was N701/$1. With the gap between the official and the parallel market widening further, the arbitrage between the official and parallel market has now widened to N416 per dollar.

However, Tinubu while speaking at the Summit said, “All foreign exchange future contracts will be honoured by this government.”

He further hinted that among several initiatives, his administration was continuing with the development of wide-ranging reforms to the fiscal and tax policies to ensure an efficient, fair and growth-friendly fiscal environment.

He stressed that despite the pain felt by Nigerians as a result of current reforms, “Soon, we shall begin to reap the rewards.”

He said, “I assure you we have a line of sight to the foreign exchange we need to refloat this economy. And we will get it.”

Tinubu also said his administration was not blind to the challenges Nigerians were facing in the financial markets, adding that the government foresees prospects for additional FX liquidity inflows needed to restore market confidence.

Tinubu said “I can allay these concerns by revealing that we have a good line of sight for the additional foreign exchange liquidity that is required to restore market confidence.”

The president said the prospects for a N1 trillion  Nigerian economy by 2026, was feasible as well as a N3 trillion – economy within a decade.

He said he remained confident that by working closely with the private sector, the financing of the $3 trillion National Infrastructure Stock could be achieved in 10 years and not in 300 years.

He said building megacities in every geopolitical zone of the size and scale of Lagos must not take the country another six decades.

Tinubu said, “We can do it in one decade. A fully networked and connected Nigeria by rail, gas, fibre optics and road network can be constructed in less than 20 years.

“Establishing thriving industrial zones in every part of Nigeria is possible before 2030.

“We can do it with double-digit, inclusive, sustainable and competitive growth.

“This is our agenda, and I would like to charge you, the captains of industry here present, to commit and redouble your commitment to our vision of a renewed and more prosperous Nigeria, a better Nigeria for all.

“For us to successfully deliver our promise to Nigerians, we recognise that it is imperative that we foster a highly collaborative relationship with the private sector. We must work together.

“I have proven capacity in this regard, as we remember the role of public-private partnership in the transformation of Lagos State under my leadership. We will replicate that across Nigeria with your unwavering support.”

Tinubu, who declared the two-day summit open, urged the participants to craft strategies that have the relentless backing of the collective will.

He said, “You have my commitment that my government will act on the Summit report when it is received from you.

“The future is calling, and this administration will not hesitate to seize this moment. Our finest destiny awaits us all. Let Nigerians breathe a sigh of renewed hope and confidence.”

The president also pointed out that his administration had introduced several measures to resuscitate the economy; including the N500 billion intervention to support small businesses and the agricultural sector.

He said by January 2024, the new student loan programme and consumer credit schemes would become operational, adding that new and affordable homes would also be built at record pace.

He tasked the summit to deliberate and proffer more solutions to complement the programmes already undertaken by the government to ameliorate the sufferings of Nigerians.

He noted that to mobilise finance for sustainable development, the government has simultaneously commenced an aggressive domestic and external mobilisation of financial resources and capital from a wide range of partners.

He said the federal government remained committed to delivering improved livelihoods and positive economic outcomes which Nigerians can tangibly feel and experience.

Tinubu said, “Our government is committed to delivering improved livelihoods and positive economic outcomes which Nigerians can tangibly feel and experience. Our only objective is to create a fairer and safer playing field for all.

“To make these priorities possible, we are strengthening the machinery and architecture of governance by establishing a public and civil service culture and structure that is performance and result-oriented.

“We shall govern ethically, with accountability and transparency; implementing sound and effective policies to accomplish our eight priorities.”

According to him, “To stimulate economic growth, we announced the end of a crippling fuel subsidy regime and the unification of foreign exchange rates.

“Combined with the effects of an unsustainable fiscal deficit and hidden subsidies, these factors distorted the money supply and created an unfair playing field for an elite crop of unpatriotic forces. But that is no more.

“These changes have been tackled head on. My government has introduced several measures to resuscitate the economy; including the N500 billion intervention to support small businesses and the agricultural sector.”

Deji Elumoye, James Emejo in Abuja and Nume Ekeghe in Lagos

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