Atedo Peterside, founder of Stanbic IBTC and ANAP Foundation, has cautioned against the President Bola Tinubu administration’s rush to strengthen the naira against the dollar and other foreign currencies.
Speaking on Channels TV’s Politics Today on Thursday, Peterside acknowledged that the current government inherited the exchange rate issue, but emphasized that a hurried approach to appreciating the currency is ineffective.
“I will be fair to this government, they inherited the exchange rate problem and what they have been doing is trying to manage it. Recently I would have thought, let’s get some stability around N1,300 or N1,400, don’t be in a hurry to appreciate the exchange rate,” he stated.
Peterside criticized the strategy of selling dollars to bureau de change operators at lower rates, only for them to resell at higher rates, saying, “Going to sell dollar to bureau de change at N1,000, N1,050, those guys will turn round two weeks later and sell it at N1,400, N1,500 and they go away laughing. What’s the point for that?”
He suggested that maintaining a stable exchange rate within a natural equilibrium band would be more effective: “It’s better to have some stability they can sustain, keep between N1,300 and N1,400 which looks to be the natural equilibrium band today, keep it there for a while, build up your reserve to let confidence come back. So stop trying to appreciate the naira in a hurry, it’s not going to work.”
The naira had fluctuated significantly, falling to around 1,900 to a dollar before rallying to approximately 1,100, and then retreating again to around 1,500 in the black market.
Peterside also urged the government to build investor confidence and curb reckless spending.
“The habit of doing five things right and doing two things wrong will not help the government achieve anything tangible,” he remarked.
While he commended the direction of Tinubu’s monetary policy, Peterside criticized the fiscal indiscipline from the top, which he believes undermines the overall economic strategy.
