Ogun State Governor, Dapo Abiodun, on Tuesday identified distortion in the foreign exchange (Forex) market under the immediate past administration as a greater havoc to the economy than the fuel subsidy regime.

Governor Abiodun made the submission on Tuesday on the sidelines of the National Economic Council (NEC) Conference at the Presidential Villa in Abuja.

The two- day conference, which started on Monday, brought together almost 36 governors, ministers and top economic advisers with a view to appraising the reforms of the federal government and mapping a route to a $1 trillion economy.

He maintained that while the fuel subsidy was not as destructive to the economy as the forex subsidy regime, which he noted eroded investors’ confidence as a result of the lack of stability in the Naira value.

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Restating the earlier submission of the Governor of the Central Bank, Olayemi Cardoso, the Ogun State Governor declared that “one of the most profound points made was that the biggest subsidy was actually forex, not fuel.”

Checks revealed that President Tinubu, in his first official remarks at his swearing-in ceremony on May 29, 2023, announced the removal of the contentious petroleum subsidy, saying that the 2023 budget that his government inherited had no provision for the funding of fuel subsidy.

The President also promised that his government will review the country’s foreign exchange, abolish the two exchange regime and introduce a unified exchange rate.

Giving a distressing narrative of the forex and subsidy regimes under the past administration, Governor Abiodun recalled that fuel subsidies undermined naira confidence, instigated speculation as firms hoarded dollars over the local currency.

He said: “At a point, people had no confidence in holding the naira because of the speed of depreciation. People began to stockpile foreign exchange. That situation has now been reversed.”

“Today, there is stability in the forex market. There is confidence in the forex market, and there is confidence in holding the naira. That is where sustaining the economy begins.”

The Ogun State Governor cautioned that without macroeconomic stability, infrastructure alone could not unlock the level of investment that would stimulate economic growth and development.

He submitted that foreign investors pay more than passing interest in policy credibility and predictability than in physical assets.

He said, “You can build all the roads you want, but if investors are not confident that they can bring in their money and repatriate it at a determined exchange rate, they will not come.”

He commended the Vice President and, incidentally, the Chairman of the NEC, Kashim Shettima, for the initiative of the conference, which he described as deeply enlightening.

“This summit has been very insightful. Speakers were assembled across various sectors to highlight where we started in 2023, the gains we have made, and how we intend to achieve a $1 trillion economy,” he said.

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