Vice President Yemi Osinbajo on Tuesday made a dramatic U-turn on his earlier position on the devaluation of Naira.

Osinbajo had on Monday said the current Naira/Dollar exchange rate was artificially low.

The Vice President, who stated this in his remarks at the Ministerial Retreat held in Abuja, said the poor state of the Naira had made it difficult to attract foreign investors into the country.

He challenged the Central Bank of Nigeria (CBN) to make the exchange rate to be reflective of the current realities in the country.

The Vice President, who reacted to the backlash that trailed the remarks in a statement issued by his Senior Special Assistant on Media and Publicity, Laolu Akande, insisted that never at a time did he advocated the devaluation of the Naira.

The statement read: “Our attention has been drawn to statements and reports in the media mis-characterizing as a call for devaluation, the view of Vice President Yemi Osinbajo (SAN) that the Naira exchange rate was being kept artificially low.

“Prof. Osinbajo is not calling for the devaluation of the Naira. He has at all times argued against a willy-nilly devaluation of the Naira.

For context, the Vice President’s point was that currently, the Naira exchange rate benefits only those who are able to obtain the dollar at N410, some of who simply turn round and sell to the parallel market at N570. It is stopping this huge arbitrage of over N160 per dollar that the Vice President was talking about. Such a massive difference discourages doing proper business, when selling the dollar can bring in 40 percent profit!

“This was why the Vice President called for measures that would increase the supply of foreign exchange in the market rather than simply managing demand, which opens up irresistible opportunities for arbitrage and corruption.

It is a well-known fact that foreign investors and exporters have been complaining that they could not bring foreign exchange in at N410 and then have to purchase foreign exchange in the parallel market at N570 to meet their various needs on account of unavailability of foreign exchange. Only a more market reflective exchange rate would ameliorate this. With an increase in the supply of dollars the rates will drop and the value of the Naira will improve.

“The real issue confronting the economy on this matter is how to improve the supply of foreign exchange, but this will not happen if we do not allow mechanisms like the Importers and Exporters window to work. If we allow this market mechanism to work as intended, we will find that the Naira will appreciate against the dollar as we restore confidence in the system.”