New Nigerian President Slates Central Bank’s Interest Rate and Currency Demonetization Policy

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The new Nigerian president Bola Ahmed Tinubu has deplored the Central Bank of Nigeria (CBN)’s aggressive interest policy which he has reportedly labeled “anti-people” and “anti-business.” Tinubu also announced the scrapping of a fuel subsidy which has been in existence since the 1970s.

Tinubu: Nigeria Needs Lower Interest Rates to Increase Investment and Consumer Spending

The recently sworn-in Nigerian president, Bola Ahmed Tinubu, has chastised the Nigerian central bank’s aggressive interest rate policy which has seen the benchmark rate rise to 18.5%. According to Tinubu, the Nigerian economy needs lower interest rates if it is “to increase investment and consumer purchasing.”

The remarks by the new Nigerian president came just over a week after the Central Bank of Nigeria (CBN)’s monetary policy committee voted to raise the benchmark rate by 50 basis points. The CBN has argued that its aggressive interest rate policy is intended to tame inflation, which rose to a 17-year-high of 22.22% in April.

However, Tinubu, who predicated his presidential campaign on reducing the country’s unemployment rate and boosting the gross domestic product (GDP), reportedly labeled the CBN’s interest rate policy “anti-business” and “anti-people.”

New Government to Review Central Bank’s Currency Demonetization Policy

Concerning the central bank’s controversial demonetization of old naira banknotes, Tinubu said his government will launch a review of this CBN policy.

“Whatever merits it had in concept, the currency swap was too harshly applied by the CBN given the number of unbanked Nigerians. The policy shall be reviewed. In the meantime, my administration will treat both currencies as legal tender,” the new Nigerian president said.

Meanwhile, in what is seemingly his first significant decision as the new president, Tinubu announced the end of a fuel subsidy which has been in existence since the 1970s. Although it is said to have made the price of petrol one of the cheapest on the African continent, the subsidy has nonetheless been a drain on Nigeria’s finances.

According to a BBC report, the fuel subsidy is estimated to have gulped as much as $9.3 billion from the government’s revenues and may be on course to surpass this in the first half of 2023.

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