Politics
It’s been kudos, knocks as Nigerians begin another cycle of hopes and despair. Perhaps, as the new administration of President Bola Tinubu prides itself with taking bold economic decisions as it clocks 30 days and more in office, it may be pertinent to remind the authorities that “good government and welfare” of all persons in Nigeria are some of the critical roles of government.
By Goddy Ikeh
APART from the past military administrations in the country, no other administration has received the kind of critical analysis as the one-month-old administration of the All Progressive Congress, APC, headed by President Bola Tinubu. The reasons are not unconnected with the key policy decisions taken by the new government as soon as it came on board. These decisions included the immediate removal of subsidy on petrol, the suspension of the Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, the suspension of the Chairman of the EFCC, abolishing the multiple foreign exchange windows and the retirement of Service Chiefs and the Inspector General of Police.
For millions of Nigerians, the removal of petrol subsidy is too big a price for decades of misrule as petrol, which they regarded for decades as the only cheap and affordable commodity they can easily point at as the billions of dollars of oil revenues are systematically stolen and squandered by people in authority and their collaborators.
Although the IMF, the World Bank and the AfDB had severally canvassed the removal of petrol subsidy by the Nigerian government and the IMF had earlier this year urged the Nigerian government to deliver on its commitment to remove fuel subsidies by mid-2023.
However, the three leading political parties in the race for the presidency in the February 25 presidential polls had during their campaigns promised to remove the subsidy on petrol if elected. But what appeared to be the last push in the campaign for the removal of petrol subsidy was the warning by the President of the African Development Bank, Akinwumi Adesina, that petrol subsidy was benefitting the rich and killing the Nigerian economy. Speaking during the presidential inauguration lecture in Abuja on Saturday, May 27, 2023, Adesina said the continued payment to subsidise petroleum products was killing the Nigerian economy.
According to him, fuel subsidy cost the Nigerian economy $10 billion alone in 2022. He explained that Nigeria keeps borrowing for what shouldn’t be borrowed for, advising that such money should be channelled to national development.
“The place to start therefore is to remove the inefficient fuel subsidy. Nigeria’s fuel subsidies benefit the rich, not the poor, fuelling theirs and the government’s endless fleet of cars at the expense of the poor,” he said.
But, President Tinubu’s announcement on Monday, May 29, 2023 of the immediate removal of the sensitive and controversial subsidy on petrol attracted mixed reactIons by many Nigerians and institutions.
Apart from the unintended reactions from the NNPC Ltd, oil marketers and petrol buyers, long queues returned, while some marketers hiked their prices and others hoarded the commodity in anticipation of higher prices. Following the announcement of the subsidy removal, the NNPCL published a new template raising the price of petro from N195 per litre to N511 a per litre.
Unfortunately, this decision is coming from the APC, which promised in the last eight years to turnaround the country’s ailing refineries, rather the nation witnessed that oil revenues were systematically stolen and squandered, while crude oil theft assumed a disturbing proportion as millions of dollars are lost daily through crude oil theft and diversion of petrol across the country’s boarders by big oil marketers and their collaborators.
In its reaction to removal of petrol subsidy, the Centre for Social Justice, CSJ, expressed concern over the decision to remove petrol subsidy without engagement and consultation with the stakeholders. It also stated that the amount of fuel supplied and what leaves the depot have remained unknown to Nigerians.
The Lead Director of CSJ, Mr. Eze Onyekpere, stated that while the group has long advocated for the removal of petrol subsidy, the abruptness and lack of transparency surrounding the recent announcement raised several critical questions and potential consequences for the citizens of Nigeria.
The centre maintained that the current manner in which the removal of subsidy was carried out raises significant concerns that demand urgent attention. “Additionally, the lack of transparency and clarity in the computation of the new fuel prices circulated by NNPCL is disturbing,” it said.
In addition, the Human Rights Lawyer, Femi Falana, SAN, stated that the ongoing discussions between the federal government and the Organized Labour should have preceded the announcement of subsidy removal.
Falana told Channels Television in a recent interview that “What you call fuel subsidy is an infinitesimal aspect of subsidies in the country.”
According to him, fuel subsidy is only a small portion of what government spends in subsidising the country’s bourgeoisie and that the government has other forms of subsidies benefiting some persons in the country. And as far as he is concerned, the removal of the subsidy means that the government cannot tackle smuggling and has now “punished the people”.
Unlike the controversy that trailed the petrol subsidy removal, some financial experts and manufacturers applauded the unification of exchange rates. Muda Yusuf, a financial expert, described the new floating of foreign exchange system introduced by the Central Bank of Nigeria, CBN, as a welcome development.
In a statement in Lagos, Yusuf, who is the Director of the Centre for the Promotion of Private Enterprise, CPPE, said that the CBN’s initiative was a bold step by the Tinubu administration.
According to Yusuf, who was a former director general of the Lagos Chamber of Commerce and Industry, explained that the liberalization of the foreign exchange market would unlock the huge potential for investment, jobs and capital flows, while investors’ confidence would be positively impacted.
In the same vein, a manufacturer, Christopher Enemuo, says the policy on unified exchange rate and independent power generation has solved about 45 per cent of the problems facing manufacturers in Nigeria.
He said that these policies were good steps towards meeting the needed targets of the manufacturers.
Enemuo, however, told the News Agency of Nigeria, NAN, in an interview in Awka, the Anambra State capital that there was need to do more as Nigeria required more than the unified exchange rate and independent power generation to move from a consuming to a producing nation. According to him, prioritizing and appreciating the role of manufacturers would make Nigeria become a producing nation with a prosperous economy. But the negative effect of the policy is that the naira has fallen 474 per dollar to about N700 per dollar.
While the suspension of the Chairman of the EFCC was seen as a confirmation that the new administration would continue with the fight against financial crimes and corruption in the polity, the suspension of the governor of the CBN had an immediate impact on the Nigerian bourse as the Nigerian stock market rose to its highest level since July 2008 on Tuesday, the first day of trading after the suspension of Emefiele.
According to a report by Bloomberg, investors are betting on a currency devaluation and sent the main index of the Nigerian Exchange to above 57,437 points, which contrasted with a flat performance for MSCI’s main emerging equity benchmark. The report stated that this move takes the country’s stocks’ year-to-date gains to 11.8 per cent, almost double the six per cent return on the MSCI index.
It noted that the rally, which followed increased gains on Nigerian dollar bonds the following Monday, reflected optimism over the policy signals from President, Bola Tinubu.
Meanwhile, two leading opposition parties in the country, the People Democratic Party, PDP, and the Labour Party, LP, have described the policies of the federal government as anti-people policies. The two parties accused President Bola Tinubu’s administration of making it difficult for many people to celebrate Sallah with his anti-people policies.
In its Sallah message, the PDP congratulated Nigerians on the celebration of Eid-el-Kabir and cautioned the APC and the federal government controlled by the party against visiting anti-people polices on Nigerians and asked the people to use the divine occasion to pray fervently for the triumph of justice and the will of the Almighty Allah in the affairs of the nation.
The statement by its National Publicity Secretary, Mr. Debo Ologunagba, the PDP commended Nigerians for their resilience in the face of “most harrowing economic hardship under the APC Federal Government”, and urged them to reinforce their patience, hope and trust in God, despite the prevailing economic, social and security challenges.
On its part, LP slammed President Tinubu’s administration for showing early signs of continuing “the wasteful lifestyle” of its predecessor with its long convoy of vehicles and bloated bureaucracy.
The acting National Publicity Secretary of the party, Obiora Ifoh, told the Vanguard newspaper in Abuja that it was ironic that an administration, whose legitimacy was still being challenged in court, would ask Nigerians to “tighten their belts and make sacrifices” while living in opulence.
“It is unfortunate that this APC administration, which is still struggling for legitimacy in court, has inflicted pain and suffering on Nigerians just under one month since assuming power albeit temporarily.
“This is an administration, which has supervised increases in the pump price of petroleum products, electricity tariffs, vehicle registration among others, but has refused to cut the cost of governance.
“President Bola Tinubu just returned from his foreign business/private visit and was welcomed by a convoy of over 100 vehicles fueled by taxpayers’ money,” he added.
In its response, the APC urged Nigerians to keep faith with President Tinubu’s administration because the president is taking bold and courageous steps to reposition the country.
The APC spokesman, Felix Morka, in a statement, said that aside from Eid-el-Kabir’s significance of personal sacrifice, it also underscores Allah’s infinite capacity and willingness to divinely provide for mankind.
“This year’s celebration remarkably coincides with a period in our nation’s history when our dear President, Asiwaju Bola Ahmed Tinubu, is taking some courageous and decisive steps to reposition our beloved country for rapid economic growth and wholesome greatness, in line with his administration’s Renewed Hope agenda.
‘’We urge Nigerians to subscribe to the virtues of sacrifice and patience as we soldier on in our quest for a better Nigeria,” the Vanguard newspaper quoted Morka as saying.
Meanwhile, while the federal government and the Organised Labour are still meeting over the palliatives and other incentives to ameliorate the plight of Nigerians over the subsidy removal, the World Bank has warned that poor Nigerians will hit 101 million without the provision of palliatives.
According to the World Bank Nigeria has one of the highest inflation rates, which pushed an estimated 4 million people into poverty between January and May 2023.
The World Bank said during the launch of the June 2023 edition of the Nigeria Development Update in Abuja that about 7.1 million poor Nigerians would become poor if the federal government failed to compensate or provide palliatives for them, following the removal of fuel subsidy.
The World Bank data stated that 89.8 million Nigerian were poor as of the beginning of this year and that additional 4 million Nigerians became poor between January and May this year, raising the figure to 93.8 million.
Reacting to the figures of the World Bank, some Nigerian economists warned that the figure could be more and urged the federal government to speed up action in providing the palliatives. Speaking on Arise Television programme, Prof Uche Uwaleke of the Nasarawa State University said that the number was higher than the World Bank figures and suggested that the savings from the subsidy removal should be used for educational and health programmes that would impact the lives of people in the urban and rural areas of the country. According to him, the local governments as well as the World Bank and religious organisations should be involved in the execution of such projects. He, however, warned against adopting the cash transfer system because of its flaws and the use of government ministries and officials in the execution of the projects.
Speaking in the same vein, Paul Alaje, an economist admitted that the figure could as high as 7 million Nigerians, who will join the poverty group. He stated during the Arise Television programme that petrol has multiple uses in the country, including powering generators for household and small businesses and transportation and that explains why the impact of the subsidy removal on petrol is having the devastating effect on food prices and businesses.
In addition, the Abuja Chamber of Commerce and Industry, ACCI, has urged the federal government to provide Small and Medium Enterprises, SMEs, with palliatives to ease the pressure and negative effects caused by subsidy removal on the sector. In a statement in Abuja by the President of ACCI, Al-Mujtaba Abubakar, the chamber said that the government should provide palliatives to cushion the effects the “immediate removal” was having on small business owners. He assured the federal government that the chamber would be available to work with it in listing the palliatives and support the SMEs would need to alleviate the pressure the subsidy removal was having on their businesses.
While Nigerians are awaiting for the announcement of the palliatives and other measures to address the pains caused by some of the policies of the one-month oil federal government, some economists and stakeholders have warned that the inflation figures for June this year may exceed 30% and that if urgent measures are not taken soon, the economy may slide into a another recession, making it the third in less than 10 years. They also reminded the federal government that the nation has recorded more than 120 deaths as a result of insecurity since May 29th 2023, and that a repeat of the poor handling of security issues by the last administration, which resulted in the killing of about 63,111 Nigerians in eight years of that administration would be disastrous for the nation.
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– July 04, 2023 @ 12:56 GMT |
Tags: CBN Felix Morka Femi Falana Goddy Ikeh Godwin Emefiele Mr. Debo Ologunagba Mr. Eze Onyekpere NNPC Ltd President Asiwaju Bola Ahmed Tinubu
