The top government officials spoke during an interactive session with the Senate Committees on Finance, Appropriations, Banking, Insurance and other Financial Institutions, at the Senate Chamber, National Assembly Complex, Abuja.
Cardoso, who was the first to address the senators, attributed the weakness of the naira to the insatiable appetite of Nigerians for the dollar and foreign goods, stressing that without moderation for demands for USD, the CBN has no magic wand to stop the free fall of the naira. He has, therefore, urged Nigerians, especially the elite, to reduce their appetite for the dollar, consumption and usage of foreign goods; and patronage of foreign schools and hospitals.
He, however, informed members of the committees that series of measures put in place by the apex bank recently to strengthen the economy were yielding results, disclosing that there has been an inflow of about $1billion into the economy.He also indicated that the Nigerian foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira. He told the lawmakers that the apex financial institution in the country had no magic wand to hurriedly get the naira stabilised. He words: “The Nigerian foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira.
“Factors contributing to this situation include speculative forex demand, inadequate forex supply, increased capital outflows and excess liquidity.
“To address exchange rate volatility, a comprehensive strategy has been initiated to enhance liquidity in the FX markets.
“This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for BDCs and IMTOs, enforcing the Net Open Position limit, Open Market Operations and adjusting the remunerable Standing Deposit Facility cap among others.
“The measures, aimed at ensuring a more market-oriented mechanism for exchange rate determination, will boost foreign exchange inflows, stabilise the exchange rate and minimise its pass-through to domestic inflation.
“Indeed, they have already started yielding early results with significant interest from Foreign Portfolio Investors (FPIs) that have already begun to supply the much-needed foreign exchange to the economy.
“For example, upwards of $1 billion in the last few days came in to subscribe to the Nigeria Treasury Bill auction of N1 trillion, which saw an oversubscription earlier this week.
“Our measures aimed at improving USD supply into the Nigerian economy has significant potential in taming the volatility of the exchange rates. However, for these measures to be sustainable, we must, as a country, moderate our demand for FX.
“It is also clear that the task of stabilising the exchange rate, while an official mandate of the CBN, would necessitate efforts beyond the Bank itself. It will also include actions by corporates and individuals to reduce our frequent demand for the dollar for business and personal needs.”
On inflation rate, the apex bank governor gave assurance that it would reduce to 21.4 per cent in 2024. He said: “Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, aiming to rein in inflation to 21.4 per cent at the medium term, aided by improved agricultural productivity and easing global supply chain pressures.”
He attributed the current food crisis in the country to insecurity, and natural causes. Cardoso further said: “The upward trend of food inflation is primarily due to supply shocks caused by insecurity, climate-induced factors such as flood and rainfall shortage.
“In some cases, inefficient, subsistent and seasonal farming practices as well as importation bottle necks that have impacted the prices of imported food items are also critical factors.
“Anecdotal evidence indicates that recent exchange rate volatility has fuelled more foreign demands for agricultural products, especially, from neighbouring countries.
“While this presents an opportunity to expand and boost agricultural output, hence creating jobs in the sector, supply constraint exacerbated demand, instigating more inflationary pressures.
“Given this backdrop, the emergency committee on food security set up by the President has been taking a number of measures and we see an end in sight to the persistent rise on food inflation.
“On our side at the CBN, we have responded with significant monetary policy tightening to reign in inflationary pressure.“Empirical analysis has established that money supply is one of the factors fueling the current inflationary pressure.
“For instance, an analysis of the trend of the money supply spanning over nine months shows that M3 increased from N52.01 trillion in January 2023 to N68.25 trillion in November 2023 representing N16.24 trillion or 31.22 per cent increase over the period.
“Increase in Net Foreign Asset (NFA) following the harmonisation of exchange rates and the N3.22 trillion ways and means advances were the major factors driving the increase in money supply.” Cardoso told the senators that the apex bank had decided to discontinue the ways and means regime. He added: “I am pleased to note the Fiscal Authorities efforts in discontinuing ways and means advances.
“This is also in compliance with section (38) of the CBN Act (2007). The Bank is no longer at liberty to grant further ways and means advances to the Federal Government until the outstanding balance as of December 31, 2023, is fully settled.
“The Bank must strictly adhere to the law limiting advances under ways and means to five per cent of the previous year’s revenue.
“We have also halted quasi-fiscal measures of over N10 trillion by the CBN under the guise of development finance interventions, which hitherto contributed to flooding excess naira and raising prices to the levels of inflation we are grappling with today.
“The CBN’s adoption of inflation-targeting framework involves clear communication and collaboration with fiscal authorities to achieve price stability, potentially leading to lowered policy rates, stimulating investment and creating job opportunities.
“Our MPC meeting on February 26 and 27 is also expected to review the situation and take further decisions on these important issues.” Aside from the CBN governor, top government functionaries like the Ministers of Finance, Wale Edun; Budget and National Planning, Senator Atiku Bagudu; Agriculture and Food Security, Senator Abubakar Kyari, also made presentations based on questions asked by the lawmakers.
The Minister of Finance, who is also the Coordinating Minister of the Economy, said the Federal Government was committed to end the current pains of Nigerians through a social security strategy.
Edun said: “In terms of the social protection that is uppermost at this moment, we have the social protection measures through direct payments. Direct payments properly done biometrically can lead to reduction in poverty.
“It is proven empirically worldwide; that is why that is an issue that is being looked at now. It is our commitment to as soon as possible, resume the social investment programme and the safety net particularly at this time.
“So, in a short term, the commitment is to face the pains of Nigerians and to do everything that can be done to ease those pains and of course on the foreign exchange side to bring about stability.
“On expenditure, we are looking at ensuring government revenue is carefully spent. Even the President has reduced his own expenditure and so for the medium term let us be assured that the monetary and the fiscal policies, which are being implemented, are going to increase production, increase funding; for the government will play its own role.
“Difficult reforms take time for the benefits to come through and our duty is to ensure in a short term that we minimise the pains to the poor and the most vulnerable.”
Minister of Agriculture and Food Security, Senator Abubakar Kyari, on his part, said there was the challenge of affordability of food, and availability in some cases.
“We have been challenged quite sometimes over COVID-19, which had impact on agriculture and all other sectors. At the same time, if you remember the flooding of 2021, and also the naira redesign of 2022/2023 at the point of harvest.
“In 2022, government came up with the policy of redesigning of naira and that really impacted on the availability of cash. In 2023 early, when farmers were just preparing for planting in 2023, they had no cash anywhere.
“Access to capital for farmers is very key. In addition, an exiting government did not plan to do wet season cultivation for 2023. I don’t think there was any impact or any intervention against the 2023 cultivation and that also impacted on the quantum of harvest in 2023.”
Senator Sani Musa, who chairs the Senate Committee on Finance, in series of posers fired at the Ministers and CBN Governor, queried the $3.3 billion collected as loan to rescue the naira since the expected positive effects have not been felt months after.
The Chairman of the Committee on Banking, Insurance and other Financial Institutions, Senator Adetokunbo Abiru, in his remarks, told the CBN governor to ensure proper synergy between Monetary and Fiscal Policies. He specifically urged the CBN governor to make available to the committee, an audited account of the apex bank and its budget.
Meanwhile, the ruling All Progressives Congress (APC) had described the protests, which erupted in Minna, the Niger State capital last Monday, as the handiwork of opposition parties.
The protest in Minna came two days after women, including local bread producers popularly known as “Gurasa”, marched through the streets of the ancient city of Kano, protesting the high cost of living, especially the hike in the price of flour used largely for the production of the staple food.
In a statement issued by the National Publicity Secretary of the APC, Felix Morka, in Abuja on Tuesday, the ruling party accused opposition parties of being the brain behind the protests, describing it as a desperate move to portray the APC-led administration as underperforming.
However, the CSOs and stakeholders who spoke with The Guardian on the issue warned Tinubu to take urgent steps to address the challenge of extreme hunger in the country before it is too late.
A World Bank report released in mid-December 2023 had indicated that Nigeria’s poverty level has taken a notch higher as a result of the recent economic and fiscal reforms of the Tinubu administration. The key reforms include the removal of petrol subsidy and the foreign exchange market rate restructuring.
The report said the policies have created intense pressures on cost of living and pushed more Nigerians into hardship, with 104 million now living below the poverty line.
Against this backdrop, the Pan-Niger Delta Forum (PANDEF), Yoruba Ronu Leadership Forum and other stakeholders strongly urged President Bola Tinubu to urgently find a lasting solution to the issue of hunger before it throws the country into crisis. The stakeholders said the pockets of protest gradually building up across the country was a serious warning and also an indication that worse may happen if urgent and appropriate actions are not applied by the administration to address “mainly hunger” in the nation.
The spokesman of PANDEF, Ken Robinson, urged the government to keep the old saying that a hungry man is an angry man to mind.
“The fact that Nigerians are beginning to come out to express their displeasure against hunger is a warning; perhaps I should say the last warning to this administration that something needs to be done,” he said.
Robinson, however, urged Nigerians to exercise caution in registering their anger, noting: “Any untoward actions would further compound the situation. I believe this hunger will not last forever. We must therefore exercise caution.”
President of Yoruba Ronu, Akin Malaolu, also cautioned Nigerians against allowing the protests to degenerate into violence or worsen the current security situation, saying it is the same masses that would bear the brunt should such happen. Malaolu, however, said it was imperative for President Tinubu and members of his cabinet to fashion out modalities that would address the ugly situation across the country.
“There is a limit to which people can endure, and I feel Nigerians have crossed the boundary of such a limit and that’s the reason the protests are building up,” he said.
Malaolu said Yoruba Ronu foresaw this situation about three or four months ago when it warned that the exchange rate will go up to about N1200 to N1500 per dollar by January or February 2024, which is “where we are today.”
“In a situation where the prices of common drugs have skyrocketed, food prices are now out of the reach of the common man, just as transportation cost is no longer affordable to the masses, just to mention a few; the people are bound to react. Tinubu’s government must stand up to its responsibilities and put things right. He must be deliberate in appointing capable hands that will help him to stabilise the economy.
“The protest is also a message to the government that it must prosecute those found to be corrupt in his cabinet. It is also an indication that those involved in the protests can no longer farm in their various areas because of insecurity. It is therefore a serious warning,” he said.
A human rights activist, Wale Adeoye, said the government must be aware that Nigerians would not listen or understand any explanation as long as hunger persists. Adeoye said the situation is particularly painful when you hear the amount of billions of naira that those in government, which include ministers, lawmakers and others, mismanage.
“War is gradually building up in the minds of the people. Some had already started the war by taking up arms against the nation in the form of terrorism, kidnapping and other criminal vices. We need to commend those that resolved to protest but even at that, it is a dangerous warning to the government.”
On his part, a Science Diplomat, Chukwuma Euphriam Okenwa, urged the Federal Government to act fast to arrest the situation. Okenwa stated that what is not contestable is that Nigerians are facing great difficulties currently, stressing that the priority of the government at the moment should be to address the challenges.
On the allegation by the APC that opposition parties were fuelling the protests, Okenwa insisted that the position of the party was uncalled for, describing it “as an attempt to divert focus from the burning national food crisis and inflation across the country, which are the real issues that led to the protests.”
The author further queried: “Should the APC be more interested in the actions and inactions of the opposition at this time or instead concentrate on tackling the current challenges that defy all the promises of a Renewed Hope that formed the fulcrum of their campaign?” He appealed to President Tinubu to go beyond giving assurances of possible action to stepping up action to tackle the challenges
“The agrarian revolution at this point is the key to food security. Fixing our dysfunctional refineries also holds the key to a fairer cost of the PMS within Nigeria, for which the prices of virtually all other goods and services depend. At this point, the government needs to address the free fall of the naira, a phenomenon that is equally significant in an economy that largely depends on importation,” Okenwa stated.
Also speaking, an environmental rights advocate and human rights defender, Nelson Nwafor, stated that the administration should consider a multi-faceted approach that addresses immediate needs while also working towards long-term solutions to improve food security and resilience.
“The APC government should consider measures such as immediate provision of food aid and assistance to those most affected by the shortage, including vulnerable population such as low-income families, children, elderly individuals and those with disabilities; distribute food supplies through established channels such as food banks, community centres and government agencies to ensure efficient delivery to those in need.
“The government should implement price controls or subsidies on essential food items to make them more affordable for consumers, monitor and regulate food prices to prevent exploitation and price gouging by sellers seeking to profit from the shortage.
“The government should explore opportunities for importing food items to supplement domestic production and alleviate shortages in the short term. “It should establish mechanisms for efficient distribution of imported and domestically produced food to ensure equitable access across regions and communities,” he said.
Nwafor added that the Federal Government should provide financial assistance, subsidies and incentives to farmers to boost agricultural production and mitigate the impact of crop failures or disruptions in supply chains.
“It should invest in agricultural infrastructure, technology and research to enhance productivity, resilience and sustainability in the long term; strengthen and expand existing food security programmes, such as school feeding programmes, food vouchers and nutrition assistance programmes, to reach more vulnerable populations; increase outreach and enrollment efforts to ensure that eligible individuals and families are aware of and able to access available support services.
“They should promote community-led initiatives and resilience-building strategies such as community gardens, food cooperatives and sustainable agricultural practices to enhance local food production and self-sufficiency. They should also provide training, resources and technical assistance to empower communities to address food insecurity and adapt to changing environmental and economic conditions.
“By adopting a holistic and coordinated approach that combines short-term relief measures with long-term solutions, the administration can effectively respond to food shortages and alleviate hardship in the country,” he added.
Nwafor stated that the allegation by the ruling party that opposition parties were sponsoring the protests should be critically examined based on the evidence presented by the party.
“It’s crucial to assess whether the APC has provided credible evidence to support their claim. Without substantial evidence, the allegation could be perceived as politically motivated or an attempt to deflect attention from underlying grievances.
“Nigeria has a history of political polarisation and accusations of opposition involvement in protests can be part of the ongoing political rivalry between parties. It’s essential to consider whether the allegation fits into a broader pattern of political discourse or is an isolated incident.
“Peaceful protests are a fundamental aspect of democratic societies, providing citizens with a platform to express their grievances and hold the government accountable. Accusations of opposition sponsorship should not be used as a pretext to suppress legitimate dissent or undermine freedom of expression.
“Instead of focusing solely on allegations of sponsorship, efforts should be made to address the underlying issues that may be fueling protests, such as socio-economic grievances, governance concerns, or human rights abuses. Dialogue and constructive engagement between the government and protesters can help de-escalate tensions and find mutually acceptable solutions.
“Ultimately, it’s essential for all parties involved to uphold democratic principles, respect the rule of law, and engage in constructive dialogue to address grievances and build a more inclusive and stable society. Accusations of opposition sponsorship should be substantiated with evidence and handled transparently to maintain trust and credibility in the political process,” he added.
Executive Director, Civil Liberties Organisation (CLO), Ibuchukwu Ezike, in his reaction, stated that there was never a time people and groups in Nigeria, including the government, would not find people to blame for one thing or the other or for their wrong actions in office.
“I think the question that we need to ask is: Are there any genuine reasons for the protests? If there are, then, matter closed. If there are not, then, there are appropriate avenues and processes to deal with such situations or they can ignore the protests if they are on the right track and doing well.
“People in government, including those who were hungry before they got the opportunity, usually forget their yesterday and would join in looting, stealing and plundering Nigeria and when the people rise against government’s wrong actions, you see them murmuring and blaming the people,” he said.
Ezike continued: “In Nigeria today, things have fallen apart and the centre can no longer hold. The mess started in 2015 when APC came to power. General Muhammadu Buhari (rtd) presided over the looting, killing and destruction of Nigeria. Nigerians couldn’t go to farms to plant because herdsmen empowered with dangerous arms took over Nigerian bushes and forests where people farm. They were destroying farm crops, raiding communities and killing the people. Farmers are scared and no longer go to farms and hunger set in. The insecurity crisis has multiplied. Hunger and destitution have become the order of the day and the economy has collapsed.
“Mass unemployment has forced young professionals who would build our economy to join okada and keke riders, bus drivers, yahoo and ritual practices and other menial jobs in order to make ends meet. Young female graduates have taken to prostitution and such other demeaning jobs as hawking, petty buying and selling and serving as sales girls for arrogant and insulting illiterate business men and women.
“The country has already been killed by the Buhari administration before May 29, 2023, when President Bola Ahmed Tinubu took over. What the current government is doing is a rescue mission – trying to see if Nigeria can be redeemed or rescued. In such an ugly, helpless and despicable situation where families cannot feed, brilliant kids cannot go to school, unemployment has become the tradition, people are no longer safe and protected and house rents have risen above the common masses; all these in the midst of mindless display of stolen wealth by politicians, what do you want the people to do? They will demonstrate their anger and dissatisfaction with the government, which is the practice the world over.”
On what the government should do to overcome current challenges of hunger and hardship, Ezike said: “Government should be apologetic and not engage in the blame game against the background of the public protesters; try to reason with the people, share in their agonies by trying to reduce their human-induced sufferings and hardship and in applying prudence in the handling of public resources and publicly punishing those who steal and plunder Nigeria dry. Doing this will help in restoring the people’s confidence in the government. This is a short term response.
“On the long term agenda, the government should be real and proactive in its efforts to return Nigeria to economic boom and public happiness. It is not rocket science. For instance, the government must think and act agriculture. It is the most viable option for now especially as we are coming into the farming season. There should be a ‘mad’ programme on agriculture,” he added.
A civil society activist, Ibrahim Waiya, also disagreed with the position of the ruling party on the protests. Waiya said: “These are not actually political issues and they shouldn’t be considered as such because the difficulty in the country is real. Rather, I will say it is a spontaneous reaction to the state of the economy. So, I can say that APC’s argument is baseless.
“The hardship is obviously unbearable and you don’t blame those coming out to cry out. It is high time the APC came out of their elusion and did something with the challenges in the country.
“As for solutions, we have so many public officers and politicians who have looted the commonwealth, roaming around the country freely; cases in the court without conviction.
“If the government is actually serious, why can’t we recover all the looted funds and re-channel them into the economy instead of borrowing abroad with conditions that are already damaging the economy.
“I have heard the government directing the release of grains from the reserve. But they have not informed Nigerians how that will be actualised; whether on subsidy or free.
“I will suggest it should be done through the private sector like banks where people can just walk in with a means of identity and collect their portion.
“The governors also need to be more proactive and discharge their responsibilities to the people of their states because it is not everything that we would continue to heap on the Federal Government.”
Similarly, a Professor of Global Economy from Bayero University, Kano, Prof. Murtala Sabo Sagagi, urged the government to manage political criticisms constructively and face the reality of the economy. His words: “Political opposition is normal in any political dispensation. No matter how good your policies are, you can’t stop opposition from picking shortfalls or weaknesses; and emphasising such deficiencies is just a wake-up call for improvement.
“It is now left for the Federal Government to look at it constructively. If there are any elements of truth, they should pay attention and if the criticism is frivolous, you discharge it as simple as that. Opposition is an added advantage and not totally bad.
“On the economy, let me say the situation is bad; such that we have never seen. And I think there is every justification to agitate.
“Nigerians need food and if you don’t produce more, inflation in food prices will continue and that is why the government needs to pay more attention to agriculture. Secondly, the government needs to support small scale industries because they can’t go to the banks because of the high rate of interest.
“The government has to improve on its policy direction, making sure people get the benefit of removal of fuel subsidy. Let people see significant of programmes on education, health and agriculture because people expect that after the removal of subsidy things will get better because those monies will be channeled to healthcare, education and other areas. When people don’t see that and instead, what we get is inflation in food prices, there will be agitation.”
The Christian Association of Nigeria (CAN), Northern States wing, has also urged the Federal Government to immediately address the hardship, inflation and insecurity in Nigeria, saying that they were no longer bearable to all Nigerians.
According to the Northern CAN, the economic hardship, especially high cost of foodstuff, transportation, goods and services have made life more unbearable.
In a statement issued by its Secretary General, Elder Sunday Oibe in Kaduna, yesterday, the group noted that current level of hunger and insecurity in the country was a sign of the failure of governance, stating that the collapse of the value of the naira and epileptic power supply gradually led to the comatose state of the economy.
Oibe said: “We wish to express deep concern over the prevailing economic hardship and the increasing security challenges across the country. The suffering in the country is becoming unbearable for ordinary Nigerians. High cost of foodstuffs, transportation, goods and services have made life difficult for many Nigerians. The epileptic power supply has led to the collapse of many small businesses.
“The continued decline in the value of the naira and the seeming inability of the government to address the situation has completely weakened the purchasing power of ordinary Nigerians. The situation is further compounded by escalating insecurity occasioned by rampant killings and kidnapping for ransom. “Government must take urgent steps to address the depressing economic and escalating security situation in the country.”