Peter Obi Lists Benefits of Flexible Exchange Rate Policy

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The former Governor of Anambra State, Mr. Peter Obi, has commended the new flexible exchange rate policy, describing it as a right step towards stabilising naira exchange rate.

Obi said this yesterday, during a brief chat with journalists at the Nnamdi Azikiwe International Airport, Abuja.
The former governor who said the flexible exchange rate policy actually came later than people (including him) expected, stated that it was however a good and appropriate policy decision that will go a long way in opening up more windows for additional inflow of foreign exchange into the country.

“The policy will have domino effect on the economy. It will encourage exporters of Nigerian products since they will now have better value for their exports. This, in effect, will propel them to expand their businesses thereby creating more jobs.

“Even manufacturers will have more and assured access to foreign exchange, which will naturally lead to increased output and more jobs. Even if more jobs are not created immediately, it will halt the present loss of jobs Nigerians are experiencing,” Obi said.

When asked about its effect on government, Obi said it would actually have positive impact as the policy would lessen the pressure on government’s financial resources.
“By removing subsidy and implementing the new flexible forex policy, there will be increased FAAC funds available for sharing among the three tiers of government,” he added.

This, he submitted, would enable governments at all levels to meet their local currency obligations without recourse to additional bailouts and borrowings.

Obi further said with additional FAAC funds receipts to the three tiers of government and increased Internally generated revenue(IGR); some states would be getting between 300 and 500 percent increased revenue compared to their previous earnings.
He therefore advised that the state and federal governments should endeavour to save part of their increased revenue for the future, while those who are already saving should try to save more.