We Simply Can’t Allow the Naira to Float, Says Osinbajo

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Says economic recovery programme to be launched next month
Tobi Soniyi in Abuja and agency report
Vice-President Yemi Osinbajo has the government cannot simply allow the naira to float, but admitted that the Central Bank of Nigeria (CBN) has confidence in floating the local currency.

Speaking at the World Economic Forum (WEF) in Davos, Switzerland yesterday, Osinbajo said the government is in talks with the CBN to fully implement the “free-float” foreign exchange policy, but it cannot put a time on the “logical conclusion” of the talks.

“It is difficult to give a timing about currency movements as you can imagine, but what it is really is that what is the policy that is going to lead to that?” Osinbajo, according to The Cable, asked.

“We already have a foreign exchange policy. Now, that policy, that is the point I have been making all along, that stabilising that policy, ensuring that it works fully, is really what we are trying to get to, in our interactions with the central bank, which of course is independent.
“We are trying to get them to see that you need to implement this policy fully. central bank of course has its own constraints; we have to be careful.

“We simply can’t allow the currency to float; we have to look at all of the market conditions and all of that. But really, the point we are making is that we must create the environment which will help the central bank as well.

“That will come from an increasing supply of dollars from oil exportation. Once we have more dollars, central bank obviously has more confidence in floating the currency.”
Osinbajo also said the government would launch its economic turnaround plan in February 2017, which would span another four years.

“We would formally launch the four-year economic recovery approved plan in mid-February,” he said.

“We’ve already written it out, many parts of it…we are discussing, but it would be formally launched as a document in the middle of February.

“But our 2017 budget is actually based on the economic recovery approved plan. We had strategic implementation plan, which we started with in 2016. The economic recovery approved plan is actually a development of the strategic implementation plan.”

Osinbajo also disclosed that the federal government would tap into Nigeria’s huge pension fund to finance infrastructure in the country.
A statement by his Senior Special Assistant on Media and Publicity, Mr. Laolu Akande, said the vice president made the disclosure at the WEF.

He noted that the President Muhammedu Buhari administration was “committed to investing more in infrastructure,” than in previous times.
Osinbajo disclosed that the government was working on how to tap into Nigeria’s huge pension fund to finance infrastructure in the country.

To do this, he stated that “we have to first derisk” such financing models for infrastructure.”
Osinbajo also declared that investment in people, in their skills and in youths would transform the African continent.

The vice president said empowerment of Nigerians was at the heart of the Social Investment Programmes of the Buhari administration.
He said the programme also had a social welfare component to help the people survive as they were being empowered.

Akande said the vice president participated and spoke in several events yesterday including a packed international Business Interaction Group of investors focused exclusively on Nigeria.
He also spoke at a panel of Building Africa, joined by Rwandan President Paul Kagame, and televised live by the CNBC Africa.

Asked to mention what kind of radical ideas that could advance the African continent, Osinbajo gave the example of the federal government’s Social Investment Programme where he said, for the first time half a trillion naira was being budgeted by the federal government for Social Investment Programmes.

“It is about investment in people, in their skills, in youths, that we have a N500 billion allocation in our budget last year and proposed for this year also,” he explained.

Referring to N-Power scheme’s training component for young graduates, and non graduates in artesanal and industrial middle-level skills, the vice president said it was an investment in education and educating large numbers of people in a short time.

“It is a radical thing to make that kind of serious investment in education,” he added.
He also referred to the planned N100,000 supporting grants to students of higher institutions in Science, Technology, Engineering and Maths, (STEM).

An active engagement with, and encouraging the private sector, he said, was also of a great deal, referring to the example of the 650,000bpd refinery project of the Dangote Group, which is going to be the largest single-line refinery in the world.

He said the Buhari administration was very confident about the recovery of the Nigerian economy,
Osinbajo said: “It is not difficult to get out of where we are if we understand why we are where we are.”

He reminded his audience that the Nigerian economy remained indisputably the biggest in terms of size of the economy.

Speaking at the Buisness Interaction Group attended by several international and local investors and business interests, and hosted by the Nigerian delegation, the vice president said that the newly developed Economic Recovery Growth Plan of the Buhari administration had been specifically designed to take the country out of recession and in the long term, continue to grow the economy.