By Hon. Bashir Omolaja Bolarinwa Ph.D
Continuing his Independence Week engagements under the *Renewed Hope Initiative*, Hon. Bashir Omolaja Bolarinwa, PhD, addressed another critical economic reform the floating of the naira, also known as foreign exchange (FX) unification.
He began by recognising the frustrations many Nigerians feel as a result of rising inflation and the fluctuating exchange rate.
“I will never dismiss the concerns of our people. The present reality is hard, but every lasting solution is born from difficult decisions.
What Mr. President has done with FX reform is not carelessness, it is courage backed by strategic intent,” he said.
Hon. Bolarinwa explained that for years, Nigeria operated a multiple-exchange-rate system that enabled arbitrage, corruption, capital flight, and investor distrust.
Politically connected individuals accessed dollars at official rates and sold them for hefty profits in the parallel market starving the economy of transparency and competitiveness.
“Nigeria was losing billions of dollars yearly to a broken system designed to enrich a few while weakening the naira. Past administrations avoided the problem because they feared the backlash.
President Tinubu chose to confront it,” he noted.
He emphasised that floating the naira is not a reckless gamble, but a reform in line with global economic best practices adopted by countries such as Egypt, Mexico, India, and Indonesia all of which experienced short-term shock before achieving stability and investment growth.
PROGRESS SINCE FX UNIFICATION
Hon. Bolarinwa highlighted early signs of recovery and structural correction:
Over $3.5 billion in FX inflows recorded in Q1 2024 the highest in years.
Foreign investors have begun re-entering Nigerian debt and equity markets.
The Central Bank has cleared over $4 billion in verified FX backlog restoring confidence.
Illicit round-tripping margins have significantly reduced due to rate convergence.
Remittances through official channels have surged, increasing dollar supply.
The naira is gradually finding its real market value, not an artificial rate sustained by public funds.
He noted that while the naira’s value is still fluctuating, a unified, transparent system inspires investor confidence and reduces opportunities for fraud.
SWOT ANALYSIS OF FX UNIFICATION (Naira Float)
STRENGTHS
Ends multiple-rate corruption and arbitrage.
Attracts foreign direct investment (FDI) and portfolio investment.
Improves transparency in the forex market.
Encourages diaspora remittances through official channels.
Reduces pressure on CBN for artificial rate defense.
WEAKNESSES
Short-term inflationary pressure on goods and services.
Businesses relying on cheap official forex face higher costs.
Requires strong monetary and fiscal coordination to stabilise.
OPPORTUNITIES
Boosts investor confidence in Nigeria’s economic reforms.
Encourages local production over import dependency.
Increases dollar inflows from exports, remittances, and investments.
Enhances competitiveness in regional and global trade.
THREATS
Market speculation can trigger volatility.
Slow economic diversification may delay full benefits.
Global oil price drops could impact FX supply.
Hon. Bolarinwa urged Nigerians to judge the policy not by the discomfort of the moment but by its national necessity and future gains.
“Floating the naira is not the problem it is the antidote to decades of FX manipulation. Every economy that walked this road suffered temporary shock before recovery. We will stabilise, and we will attract the world back to our markets.”
He reiterated that reforms under President Bola Ahmed Tinubu are interconnected, not isolated:
“Subsidy removal freed revenue. FX unification is cleaning the financial pipeline. Together, they are laying the foundation for a stronger currency, bigger investments, and sustainable growth.”
He appealed for patience and patriotism while assuring citizens that complementary measures, fiscal discipline, export expansion, credit support, and social cushioning, are in motion.
Signed:
Hon. Bashir Omolaja Bolarinwa Ph.D