The removal of petroleum subsidy by the Federal Government worsens inflation in Nigeria. However, President Bola Tinubu asks for understanding, adding that good things are coming soon

By Richard Elesho

“My father made your yoke heavy, and I will add to your yoke; my father also chastised you with whips, but I will chastise you with scorpions.” (1 Kings 12:14)

Those conversant with the biblical account of the epic battle of attrition between Jeroboam son of Nebat and Rehoboam, successor of King Solomon (1 Kings 12) will be quick to say Nigeria may be headed on a familiar path. Bola Ahmed Tinubu came to the office as president of the biggest African country on earth, with plenty of goodwill and high expectations. For good reasons.

The President had become a reference point for good conduct in his previous public office portfolios, first as a Senator, pristine pro-democracy activist, and then Lagos State Governor. The icing on the cake was the promise of quick relief from the pains and economic woes of the years of the locusts, which the past decade or so represented. Little wonder his campaign was driven by a renewed hope mantra.

Thus, after more than three decades of political sapience and kingmaking, which bred a remarkable appetite for entitlement to the throne, Tinubu won the number one office with majority votes, in the 25 February presidential election. His party, the All Progressives Congress, APC, polled 8.7 million votes to dust Atiku Abubakar of the Peoples Democratic  Party, PDP and Peter Obi of the Labour Party, LP, who scored 6.9million and 6.1million votes, respectively.

Tinubu’s inauguration on 29 May was with pomp. The new helmsman was most regal in the delivery of a poetic and inspirational inaugural speech. “Today, Fate and Destiny join to place the torch of human progress in our very hands. We dare not let it slip.

“We lift high this torch so that it might shine on every household and in every heart that calls itself Nigerian. We hold this beam aloft because it lights our path with compassion, brotherhood, and peace. May this great light never extinguish… We are here to further mend and heal this nation, not tear and injure it.” He waxed lyrical.

He enunciated far-reaching policies to unify foreign exchange, halt currency swaps, and long abused petroleum subsidy regimes. And like a president in a hurry to succeed, he strolled out of his prepared inaugural text to drop the bombshell. “Subsidy is gone forever.”

The cancellation of the subsidy was a decision long overdue. Over the years, it had transmuted into a conduit pipe for siphoning national wealth into a few private deep pockets. Successive administrations from the Ibrahim Badamosi Babangida, IBB, military junta down to the immediate past Muhammadu Buhari Presidency had foot dragged on the thorny issue because of its short time consequences on the economy. Every frontline candidate in the February election had promised to terminate it to end its perennial abuse.

For instance, Nigeria reportedly frittered a humongous N9 trillion in subsidy payments in the last 30 months of the Buhari administration, covering from January 2021 to June 2023. It, therefore, didn’t come as a surprise to many when the administration’s budgetary provision for subsidy was to expire on the last day of June. That was the authority Tinubu activated by his line, “subsidy is gone”.

 

Rolling up the sleeves for work

Beyond the razzmatazz of the inauguration ceremony, the new president settled quickly to the task of implementing his transformation agenda for the country.

In the build-up to the election and during his inauguration, Tinubu promised to tackle insecurity, focus on infrastructure development, and build on Buhari’s records. The President hit the ground running from the moment he took his oath of office.

An experienced auditor and talented head hunter, he began by assembling a kitchen cabinet made up of former Benue State Governor, Senator George Akume as Secretary to Government of the Federation, SGF; former House of Representatives Speaker, Femi Gbajabiamila as Chief of Staff; former anticorruption czar and retired Assistant Inspector General of Police, AIG, Nuhu Ribadu as National Security Adviser; former Lagos State Commissioner, Dele Alake as Special Adviser Communication and 18 other Special Advisers.

The Jagaban, as Tinubu is also known has equally rejigged Nigeria’s security architecture. He approved the appointment of new service chiefs to scintillate the war against insecurity and crime. He left no one in doubt that a new sheriff with eyes for details, merit, and Federal Character was in town.

The new service chiefs include the Chief of Defence Staff, Major-General C.G Musa; the Chief of Army Staff, Major-General T. A Lagbaja; the Chief of Air Staff, AVM H.B Abubakar; the Chief of Naval Staff, Rear Admiral Emmanuel Ikechukwu Ogalla; and acting Inspector-General of Police, DIG Kayode Egbetokun

He has restored the almost extinct culture of regular briefings with the security chiefs, reiterating the need to be on top of all security challenges. Tinubu’s early days in Aso Villa were, however, not about appointments alone. The president moved with remarkable speed to set the legal framework for his imminent reforms. Subsequently, he signed many bills that would drive the reforms.

 

The following are four crucial bills he recently assented to:

 

Judicial Officers Law

The first bill, titled ‘Constitution of the Federal Republic of Nigeria, 1999 (fifth alteration) (No.37), 2023,’ was signed into law on June 8, nine days after he assumed office. The law standardizes 70 years of retirement age for judges and uniform pension rights.

Electricity Act

The following day, June 9, Tinubu signed a new electricity bill into law. That grants states, companies, and individuals the authority to generate, transmit, and distribute electricity. This law aims to establish a comprehensive legal and institutional framework for a competitive electricity market, improve access to electricity, and promote the use of renewable energy.

 

Access to Higher Education Act

On June 12, Nigeria’s Democracy Day, Tinubu dashed Nigerian youths, with a life-changing law. That day, he assented to a law facilitating financial assistance to Nigerian students in tertiary institutions. The law allows students access to interest-free loans from the Nigerian Education Loan Fund. The initiative gives priority to poor students.

 

Data Protection Law

Tinubu signed the data protection bill into law on June 14. This act establishes the Nigeria Data Protection Commission, NDPC, and empowers individuals to seek redress in the event of a data breach. The law emphasizes the fair, lawful, and accountable processing of citizens’ data.

Tinubu’s  ascension has improved Nigeria’s standing in the international community. Famous abroad for his principled stand against military dictatorship, Tinubu added a feather to his glowing cap on Sunday, 10 July. That was when West African heads of state chose him to lead their regional bloc, the Economic Community of West African States, ECOWAS  for the next year. He replaced Umaro Sissoco of Guinea-Bissau.

It is instructive that that was the first time Tinubu was attending the apex regional body’s meeting as president. In his remarks, the Nigerian leader called on ECOWAS to “stand firm on democracy,” declaring, “We will not accept coup after coup in West Africa again. Democracy is very difficult to manage, but it is the best form of government…We need it, to be an example to the rest of Africa and the world,” he said

Tinubu warned that terrorism and the emerging pattern of coup d’etat in West Africa had reached alarming levels and demanded urgent, concerted actions.

Enviable as his meteoric rise in international politics and prompt attention to domestic dynamics might be, the nascent administration has not disguised its willingness to apply the rod whenever necessary. For instance, the suspended governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, who supervised a most shoddy currency redesign, has been cooling off with law enforcement agents.

On Tuesday, 25 July, the Department of State Security, DSS, charged him with unlawful possession of a firearm before Justice Nicholas Nwebo of the Federal High Court, Lagos.

Meanwhile, Emefiele’s woes continued as the DSS re-arrested him against a court order. The court had granted him N20m bail, which his captors disdained. His arrest sparked a show of shame between DSS and Correctional Services officers.

Similarly, another embattled official of the federal government, who heads the Economic and Financial Crimes Commission, EFCC, Abdulrasheed Bawa, was suspended and has been in detention. He is yet to be arraigned in court.

Jagabanomics: A tale of woes and despair?

Despite the impressive gains and potentials of the president’s agility, Jagabanomics has not been all smiles for the common man. If anything, for now, it has burdened the masses rather than reduce their yokes.

Within a few days, the Nigerian National Petroleum Company Limited, NNPCL as though on standby for the removal, announced an adjustment in the price of premium motor spirit, PMS from its regulated window of N179 – N199 per litre to between N488 – N550. Nigerians were still adjusting to the reality of the increase when another upward review of about N100 per litre was made on Monday, 17 July. Today, fuel sells for between N550 and N700 per litre, depending on your location.

The Federal Government, while justifying the increase through Mele Kyari, Managing Director, NNPCL. said it is a response to market forces. “Yes, what I know is that the market forces will regulate the market.

“Prices will go down sometimes; sometimes, they will go up. But supply will be stable, and I’m also assuring Nigerians that this is the best way to go forward so that we can adjust prices when market forces come to play.”

Also speaking, the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, attributed the rise in price to the global crude oil price increase.

“As a regulator, I told you back in May that we are not going to be setting prices. The market will determine itself, and as you saw back in early June when prices came out, it was based on the cost of importation plus other logistics of distribution and, of course, the profit margin by the importer. This market is deregulated; it is open to all participants.” Farouk explained.

Uneasy lies the head that wears the golden crown, and so goes a wise saying. Deregulation has inflicted pain on already traumatised souls. The effects of the removal on the standard of living of Nigerians have triggered a fresh comparison between the symbolism of whips and scorpions in the Rehoboam narrative and the Nigerian economic condition.

The policy caused a significant spike in the prices of goods and services, just as the double-digit inflation trend inherited from the preceding administration of General Muhammadu Buhari worsened.

A dubious strategy

The Nigerian economy remains in the doldrums, with more citizens getting smart by half to survive its stark realities. In the early hours of Tuesday, 18 July, a mild drama occurred at the popular Berger bus end of the Lagos /Ibadan expressway.

A woman in a season of life that could be described as old, clad in faded white iron, and buba appealed for help from fellow commuters in an Ibadan-bound bus. She claimed not to be aware that fuel prices and the cost of transportation had increased. She was hungry and then earnestly begged for alms to buy food and transportation to Ibadan for a crucial engagement

Trust Nigerians, people responded generously to her cry, even as she prayerfully acknowledged their donations. However, just when the driver started collecting money for the journey, Mama came down from the bus and lifted her dirty old sack, which all the while was with other people’s luggage on the floor and bolted. They have just been scammed! Minutes later, after they had set on the journey, they spotted the old woman with her sack balanced on her head, probably looking for new victims.

Begging has become a way of life for many city dwellers. More people are genuinely in need of help. Some feign it. Short of carrying guns, they employ tricks to fleece others of their hard-earned money. Dubious survival instincts, in a depressed economy.

Naturally, the after-effect of the astronomical increases falls back on every aspect of human living. Most affected is the transport industry and, by extension, the prices of food items and other commodities. As of the end of June, inflation has soared to a 17-year-high of 22.79 per cent, which the National Bureau of Statistics (NBS), blamed on food inflation, following the continued acute shortage of food and its high prices. Although President Tinubu recently declared a ‘state of emergency’ on food security, it is yet to be seen how that will assuage the suffering occasioned by the fuel subsidy removal. The high cost of transporting foods and other consumables has almost taken them out of the reach of the citizens. See the picture in parts of the country.

In Benin, the Edo State capital, many small and medium business operators have since closed shops because of the inability to run their power generators, which had been the lifeline of their operations.

A welder, Osakpolo Wilfred lamented how the fuel subsidy removal has crippled his business. He said: “Before now, we have been struggling to sustain the business. We depend on generators that run on petrol or diesel, both of which are now beyond my reach. No be die be dat?”

Among the hardest hits are civil servants and students. A check by the magazine revealed that many vehicle owners have resorted to using public transportation to their respective places of work, as they could no longer afford to buy enough fuel for their vehicles at the new pump prices. One such who wished to be identified simply as Peter said: “To fuel my car to last me for a week, I will need a minimum of N160,000. But, how much is my salary? That’s why I have decided to drop my car for now. “

Meanwhile, members of the Edo Civil Society Organizations, EDOCSO, staged a peaceful protest in Benin, over the recent increases of the pump price of petrol, which they said have negatively affected the cost of living. They called on President Tinubu to, as a matter of urgency, fix the nation’s refineries. They noted that he must also increase the minimum wage as the suffering is becoming unbearable for the masses.

The interim Chairman of EDOCSO, Austin Enabulele who led the protest, said: “We want to draw the attention of President Tinubu to the fact that it is responsible for any government that before you remove whatever is sustaining the people as subsidy, you must put plans in place so that when you remove the subsidy, the people will not be so much affected. Our refineries should be fixed so that we can refine our crude oil and get petrol at a cheaper rate. “We also want them to understand that the NNPCL is a private entity, and so they can not just wake up and start giving us prices any time they like. He should let Nigerians breathe, let the poor breathe. This is the time to show that he is the president of this country,” he added.

In Lafia, the impact of petroleum subsidy removal is biting hard. The cost of transportation had nearly doubled intra-and interstate. For instance, from Lafia to Keffi, it used to cost N1,500, but that has since changed. A traveller would now cough out N2,500 for the same trip. To get to Abuja from Lafia, the Nasarawa State capital, a commuter must be prepared to part ways with N3,000 as against the previous N2000. In the Lafia metropolis, a motorcycle drop used to cost fifty nairas. The new wave has moved the fare to N100. The same applies to the tricycles popularly called Keke Napep.

A transporter, Abdul Makori, who plies the Lafia-Akwanga route, told this magazine that the increment in pump price necessitated the change in fares. “We buy fuel at very high prices, maintain our vehicles, and take care of other things. We can’t continue the way it used to be. So, our prices have to reflect the change in the pump price of petrol.”

Transportation to and from rural areas where foods are produced is worse. Rural markets in Azara, Doma, Akwanga, Shendam, Obi, etc. have shot up considerably. Produce that previously cost N200 to N500 now cost N500 to N1000. This has got a corresponding effect on the prices of commodities in markets around the state.

TheNEWS checks at markets around Lafia indicate that prices of food items are on a steady climb. For example, a unit measurement [mudu] of garri, which used to sell for N300, is now N450-N500. Palm oil, vegetable oil, rice and beans, and a number of the most purchased staple are sold at prices different from what was, some three months ago.

Traders blame the increasing cost of transportation for the hike in the cost of their wares. “We spend a lot to transport our goods from where they are bought to the shops. It is taking a big part of our profit. This is why we need to increase the prices and as you can see, the additions are almost daily. This shows in the unsteady cost of transportation. The prices could be stable or even decrease if something can be done about what we spend on transportation” Lydia Ojukwu, a market leader at the Tomato Market Lafia, told our reporter.

It has been a mountain climb for many families in Port Harcourt, Rivers State, since the removal of the subsidy. It has caused a sharp increase in transportation fares rubbing off on the costs of living.

Our Correspondent who visited major parks in the state capital reports that a twelve-seater bus from Port Harcourt to Lagos which was N21,500 is now between N22,750 to N25,000, and a Luxurious bus which was N12,500 is currently N16,000.

From Port Harcourt to Enugu, which was N7,000, is now between N8,000 and N8,500. Those travelling to Onitsha will now have to pay N7,500 as against N5,000. Port Harcourt to Asaba is now N8,000 and also increased from N6,500 by Sienna bus. Other routes such as Port Harcourt to Benin, which was N7,000 is now between N7000 to N9,000. Buses to Abuja, formerly N24,700, are now between N25,500 and N27,000.

Families have adopted emergency measures to survive crushing the effects of the cost of living in Rivers State. Some of the Housewives who spoke to our Correspondent lamented the high costs of goods and services.

Mrs Fineface Wokoma, a civil servant and mother of three, said: “We have decided to be attending nearby Bible-believing Churches rather than attending ours that is farther away from our house. Now that the children are at home on holiday, the pressure is more because of feeding costs. We also anticipate an increase in school fees when they resume. For now, there are no frivolous pleasure outings to fun places like leisure parks and Eateries.”

Mrs Tamuno Elekima lamented the high cost of foodstuffs. She pointed out that “In the Market these days you can’t expect that the prices of goods you bought yesterday will remain the same the next day. We have decided to measure cereals and grains in buckets and cups rather than the usual practice of buying in bags. We have to ration food and eat twice daily.

“Out of the three cars we have, we are only fuelling one for important errands. We’re already considering putting two on sale. We have to feed first before fuelling and maintaining cars.”

Other households are keying into the conversion of their petrol generator to gas by changing the carbonator. They explained that gas is very safe and cheaper than Petrol. The carbonator costs between N20,000 to N30,000.

Of course, people opt to trek short distances rather than paying for tricycles, popularly called Keke.

Mr Lebari Lergbosi, a football enthusiast, said he had lowered his craving for live matches because of the increase in bouquets for his DSTV. He has now resorted to paying for a flower bouquet.

The rising cost of education

As the cost of living soared across the land, stories that educational institutions had increased charges spread rapidly.

Since the implementation of the no subsidy regime, the cost of acquiring education has increased across all levels, in both private and public schools. For instance, the Federal Ministry of Education jerked up fees in unity schools, otherwise called Federal Government Colleges, by more than one hundred per cent.

According to the circular titled “Approved fees/ charges for Federal Unity Colleges (1st Term) for new students,” signed by Hajia Binta Abdulkadir, the Director of Senior Secondary Education, the new students will now be required to pay N100,000 instead of the previous fee of N45,000.

“The latest fees/charge increment will affect virtually all aspects and activities of the school, including tuition and boarding fees, uniform, textbooks, deposit, exercise books, prospectus, caution fee, ID card, stationery, clubs and societies, sports, extra lesson, insurance, et al.” The document added.

The University of Lagos, UNILAG, also announced an upward review of its fees. The Vice-Chancellor, Professor Folasade Ogunsola, disclosed this development during a meeting with representatives of non-teaching staff unions on Thursday, July 20, 2023, at the Senate Committee Chamber.

According to her, the proposed fees for undergraduate students will see a substantial increase from the previous amount of about N20,000 to over N100,000, depending on the course of study.

As per the new tuition structure, undergraduate students without laboratory or studio usage will be required to pay N100,750, while those with lab or studio use will face a fee of N140,250. For students pursuing courses in the College of Medicine, the tuition will be set at N190,250.

However, Federal Government issued a statement that tuition fees in all its universities “are free.”

Control measures

The governors of some states have taken proactive steps to mitigate the effect of the policy on citizens. States like Kwara and Edo have embraced the declaration of two days as work-free days for public schools and civil servants, just as Benue state governor, Hyacinth Alia, directed that civil servants in the state devote the work-free days to farming.

Governor Siminalayi Fubara of Rivers State rolled out 17 luxury buses for intrastate transportation. He said buses would convey commuters on designated major routes in the state capital and beyond. Similarly, Governor Dapo Abiodun of Ogun state rolled out N10,000 palliative and other measures for each public servant and pensioner, to enable them to cope with the economic shocks for three months in the first instance with effect from July 2023. Abiodun who noted that the measures were in line with the current realities in the country, also approved hazard allowance for all health and medical personnel, as well as approved peculiar allowance for public servants in the state

Concerned about the plight of its members, the Nigeria Labour Congress, NLC, and Trade Union Congress, TUC, are currently in talks with the federal government over mitigating the impact. The two labour unions have given President Tinubu an ultimatum to do something or face mass protest action.

Similarly, the Workers’ Alliance for Inclusive Socio-economic Reforms, WAISER, has called on the federal government to set a new minimum wage of N200,000 monthly. The group also proposed that the government should dedicate two days a week to e-governance to ease the effect on workers and improve productivity.

Respondents in Port Harcourt commended the free transportation initiative. They, however, noted that the 17 buses were too few and asked for more. They challenged local government councils to duplicate the gesture for rural dwellers.

In a rear display of concerns, the Head of the Civil Service of the Federation, Dr Folasade Yemi-esan, on Tuesday, 25 July, lamented the hardship the removal of fuel subsidy has visited on Nigerian civil servants.

“Workers now find it difficult to come to work every day. It’s now a burden on them because of the increase in the fuel price,” said the HoCSF.

According to her, the federal government has set up an ad-hoc committee that will soon come up with plans to ameliorate the suffering. Further to that, the National Economic Council, NEC, headed by Vice President Kashim Shettima, after a meeting, disclosed plans for comprehensive palliative measures.

The scope of the new interventions covers conditional cash transfers to the poorest of the poor, a cash award policy in aid of civil servants, a new minimum wage for workers, payment of outstanding salaries, support for Micro, Small and Medium enterprises (MSMEs) and the implementation of the energy transition plan.

There were speculations that the government planned to pay N8,000 as a monthly allowance to 12 million poor households. In addition to the above, gains and fertilisers are to be released by the federal government to states for distribution or sale at subsidised prices.

Meanwhile, the federal government on Wednesday denied reports on the increase or introduction of tuition fees in its institutions. Alake, in a statement, insisted that government-owned universities are tuition-free.

“We are aware that some universities have in recent weeks announced an increase in the amount payable by students on sundry charges.

“However, the fact remains, and we have confirmed that these are discretionary charges by each university for hostel accommodation, registration, laboratory, and other charges. They are not tuition fees.” The image maker said.

 

Reactions

Not a few individuals, groups, and corporate organizations including the international community have shared their reaction to the new subsidy policy. Here are some of them.

The World Bank endorsed the new economic approach. The apex global financial institution projected that Nigeria will save N3.9 trillion in 2023 following subsidy removal and FX unification move, saying it will also stop the country from falling off the brink.

Alex Sienaert, the chief economist at the bank, made this known at the launch of the Nigeria Development Update for June 2023 themed Seizing the Opportunity.

“The recently undertaken PMS subsidy & FX reforms are historic, N3.9 trillion in savings in 2023 alone, stops Nigeria from going over a fiscal cliff and sets the stage for a new, upward investment, growth, and development trajectory,” he said.

“While inflation will be higher in 2023, it will be lower in 2024-2025 if the right policy mix is sustained,” he said.

The Chief Executive Officer, of Financial Derivatives Company Limited, Bismarck Rewane assured Nigerians that the current economic reforms and policies are the right way to go. He was optimistic that they would start yielding results from the first quarter of next year. He told Arise News TV that although the picture may look bleak, there will be light at the end of the tunnel.

“The bad news is that there is pain and they will be more pain in the short run, but the good news is that there will be gains in the first quarter of 2024,” he said.

“I used to think that you will get that sooner, but you will need to have your supplementary budget and recycle money into the system.”

Akume, secretary to the government of the federation, SGF, asked Nigerians to be patient while the government implements solutions to “normalise” the price of petrol.

The SGF described the petrol subsidy regime as regressive, adding that the annual payments were not sustainable and that Tinubu “had to act”.

Akume also said Tinubu’s actions of unifying the exchange rate and rejigging the country’s security architecture were proof of his commitment to securing the country’s future.

 

The Independent Petroleum Marketers Association of Nigeria, IPMAN, said the hike was threatening the survival of their businesses. Chinedu Anyaso, Chairman of IPMAN Enugu Depot Community, said average sales had dropped by about 50 per cent from May 30 to date.

He said that if the negative development was not urgently challenged, many operators would shut down, adding that it would result in the collapse of the downstream sector and the loss of numerous jobs.

“Most marketers are finding it difficult to remain in business because the increasing cost of operation, payment of workers, and meeting bank obligations is becoming difficult.

The Publisher, Editor in Chief, The Nigerian Post Newspaper, Abu Michael appealed to President Tinubu not to turn the country into a “cemetery of hopelessness” occasioned by hunger and untold hardship.

While noting that in just his first hundred days in office, the present government has made the life of poor Nigerians miserable, he lamented that rather than the renewed hope promised, Nigerians are experiencing renewed hopelessness. Abu urged the president to review his policies and let the poor breathe.

He described the N8000 promised to poor Nigerians, as miserable and less than the N10000 the former administration paid to vulnerable Nigerians. “In this age and time, that is making a mockery of the lives of the people.’

Coordinator of Southwest Agenda for Asiwaju, SWAGA, Senator Adeyeye said subsidy removal was the only way to go if the Nigerian economy would ever get out of the woods. He said it was a decision that ought to have been taken more than a decade ago, but it was better late than never.

“The removal of oil subsidies and the new exchange rate regime of President Bola Tinubu, for now, has led to inflationary pressure. This is causing some hardship on the part of the masses. As the saying goes, there is no gain without pain. Like the president has said that while trying to give birth, one must go through the pains of labour. However, when the child is born, a safe birth will keep the mother happy.

“Nigerians should give President Tinubu some time to allow

his policies to mature and for us to begin to see the positive effects. If Tinubu had not taken those steps, it could have led to a complete crash of the Nigerian economy with its attendant social, economic, and political implications.”

Adeyeye asked Nigerians not to judge Tinubu by results from a few days in office, adding that they would reap the benefits of the painful decisions taken now in the future.

A public affairs analyst, Moses Obajemu, cautioned the government against mismanagement of funds that would accrue from the new policy. He suggested that the president should set up an Economic Revival Fund and Subsidy Reinvestment Program to re-energise ailing sectors of the economy. He further suggested the constitution of a high-powered committee to manage the funds.

The Christian Association of Nigeria last Friday called on the federal government to ensure that the fuel subsidy palliatives being considered should go beyond cash transfers. CAN President, Dan Okoh, made the call in a statement last Friday.

“The fuel subsidy palliatives being considered by the government should go beyond cash transfers. The government should consider introducing mass transport across the states to reduce the cost of transportation. The multiplier effect of this will be profound.

“Government should take measures to reduce the price of fuel. Such measures should include removal of unnecessary levies and taxes on imported petroleum products, the stabilisation of the foreign exchange market, and putting back our local refineries to functional and effective use,” CAN stated.

For now, it is subsidy pains all the way. When will the gains come?

*With additional reports from Jethro Ibileke in Benin; Maduabuchi Mmeriben, Kano; Okafor Ofiebor in Port Harcourt and  Nkrumah Bankong Obi, Lafia.

 

Tinubu’s National Broadcast: Let’s Look Beyond Temporary Pains And Aim At The Larger Picture

President Tinubu

My fellow citizens,

I want to talk to you about our economy. It is important that you understand the reasons for the policy measures I have taken to combat the serious economic challenges this nation has long faced.

I am not going to talk in difficult terms by dwelling on economic jargon and concepts. I will speak in plain, clear language so that you know where I stand. More importantly, so that you see and hopefully will share my vision regarding the journey to a better, more productive economy for our beloved country.

For several years, I have consistently maintained the position that the fuel subsidy had to go. This once beneficial measure had outlived its usefulness. The subsidy cost us trillions of Naira yearly. Such a vast sum of money would have been better spent on public transportation, healthcare, schools, housing and even national security. Instead, it was being funnelled into the deep pockets and lavish bank accounts of a select group of individuals.

This group had amassed so much wealth and power that they became a serious threat to the fairness of our economy and the integrity of our democratic governance. To be blunt, Nigeria could never become the society it was intended to be as long as such small, powerful yet unelected groups hold enormous influence over our political economy and the institutions that govern it.

The whims of the few should never hold dominant sway over the hopes and aspirations of the many. If we are to be a democracy, the people and not the power of money must be sovereign.

The preceding administration saw this looming danger as well. Indeed, it made no provision in the 2023 Appropriations for subsidy after June this year. Removal of this once helpful device that had transformed into a millstone around the country’s neck had become inevitable.

Also, the multiple exchange rate system that had been established became nothing but a highway of currency speculation. It diverted money that should have been used to create jobs, build factories and businesses for millions of people. Our national wealth was doled on favourable terms to a handful of people who have been made filthy rich simply by moving money from one hand to another. This too was extremely unfair.

It also compounded the threat that the illicit and mass accumulation of money posed to the future of our democratic system and its economy.

I had promised to reform the economy for the long-term good by fighting the major imbalances that had plagued our economy. Ending the subsidy and the preferential exchange rate system were key to this fight. This fight is to define the fate and future of our nation. Much is in the balance.

Thus, the defects in our economy immensely profited a tiny elite, the elite of the elite you might call them. As we moved to fight the flaws in the economy, the people who grow rich from them, predictably, will fight back through every means necessary.

Our economy is going through a tough patch and you are being hurt by it. The cost of fuel has gone up. Food and other prices have followed it. Households and businesses struggle. Things seem anxious and uncertain. I understand the hardship you face. I wish there were other ways. But there is not. If there were, I would have taken that route as I came here to help not hurt the people and nation that I love.

What I can offer in the immediate is to reduce the burden our current economic situation has imposed on all of us, most especially on businesses, the working class and the most vulnerable among us.

Already, the Federal Government is working closely with states and local governments to implement interventions that will cushion the pains of our people across socio-economic brackets.

Earlier this month, I signed four (4) Executive Orders in keeping with my electoral promise to address unfriendly fiscal policies and multiple taxes that are stifling the business environment. These Executive Orders on suspension and deferred commencement of some taxes will provide the necessary buffers and headroom to businesses in manufacturing sector to continue to thrive and expand.

To strengthen the manufacturing sector, increase its capacity to expand and create good paying jobs, we are going to spend N75 billion between July 2023 and March 2024. Our objective is to fund 75 enterprises with great potential to kick-start a sustainable economic growth, accelerate structural transformation and improve productivity. Each of the 75 manufacturing enterprises will be able to access N1billion credit at 9% per annum with maximum of 60 months repayment for long term loans and 12 months for working capital.

Our administration recognises the importance of micro, small and medium-sized enterprises and the informal sector as drivers of growth. We are going to energise this very important sector with N125 billion.

Out of the sum, we will spend N50 billion on Conditional Grant to 1 million nano businesses between now and March 2024. Our target is to give N50,000 each to 1,300 nano business owners in each of the 774 local governments across the country.

Ultimately, this programme will further drive financial inclusion by onboarding beneficiaries into the formal banking system. In like manner, we will fund 100,000 MSMEs and start-ups with N75 billion. Under this scheme, each enterprise promoter will be able to get between N500,000 to N1million at 9% interest per annum and a repayment period of 36 months.

To further ensure that prices of food items remain affordable, we have had a multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain.

In the short and immediate terms, we will ensure staple foods are available and affordable. To this end, I have ordered release of 200,000 Metric Tonnes of grains from strategic reserves to households across the 36 states and FCT to moderate prices. We are also providing 225,000 metric tonnes of fertilizer, seedlings and other inputs to farmers who are committed to our food security agenda.

Our plan to support cultivation of 500,000 hectares of farmland and all-year-round farming practice remains on course. To be specific, N200 billion out of the N500 billion approved by the National Assembly will be disbursed as follows:

-Our administration will invest N50 billion each to cultivate 150,000 hectares of rice and maize.

-N50 billion each will also be earmarked to cultivate 100,000 hectares of wheat and cassava.

This expansive agricultural programme will be implemented targeting small-holder farmers and leveraging large-scale private sector players in the agric business with strong performance record.

In this regard, the expertise of Development Finance Institutions, commercial banks and microfinance banks will be tapped into to develop a viable and an appropriate transaction structure for all stakeholders.

Fellow Nigerians, I made a solemn pledge to work for you. How to improve your welfare and living condition is of paramount importance to me and it’s the only thing that keeps me up day and night.

It is in the light of this that I approved Infrastructure Support Fund for the States. This new Infrastructure Fund will enable States to intervene and invest in critical areas and bring relief to many of the pain points as well as revamp our decaying healthcare and educational Infrastructure.

The fund will also bring improvements to rural access roads to ease evacuation of farm produce to markets. With the fund, our states will become more competitive and on a stronger financial footing to deliver economic prosperity to Nigerians.

Part of our programme is to roll out buses across the states and local governments for mass transit at a much more affordable rate. We have made provision to invest N100 billion between now and March 2024 to acquire 3000 units of 20-seater CNG-fuelled buses.

These buses will be shared to major transportation companies in the states, using the intensity of travel per capital. Participating transport companies will be able to access credit under this facility at 9% per annum with 60 months repayment period.

In the same vein, we are also working in collaboration with the Labour unions to introduce a new national minimum wage for workers. I want to tell our workers this: your salary review is coming.

Once we agree on the new minimum wage and general upward review, we will make budget provision for it for immediate implementation.

I want to use this opportunity to salute many private employers in the Organised Private Sector who have already implemented general salary review for employees.

Fellow Nigerians, this period may be hard on us and there is no doubt about it that it is tough on us. But I urge you all to look beyond the present temporary pains and aim at the larger picture. All of our good and helpful plans are in the works. More importantly, I know that they will work.

Sadly, there was an unavoidable lag between subsidy removal and these plans coming fully on line. However, we are swiftly closing the time gap. I plead with you to please have faith in our ability to deliver and in our concern for your well-being.

We will get out of this turbulence. And, due to the measures we have taken, Nigeria will be better equipped and able to take advantage of the future that awaits her.

In a little over two months, we have saved over a trillion Naira that would have been squandered on the unproductive fuel subsidy which only benefitted smugglers and fraudsters. That money will now be used more directly and more beneficially for you and your families.

For example, we shall fulfill our promise to make education more affordable to all and provide loans to higher education students who may need them. No Nigerian student will have to abandon his or her education because of lack of money.

Our commitment is to promote the greatest good for the greatest number of our people. On this principle, we shall never falter.

We are also monitoring the effects of the exchange rate and inflation on gasoline prices. If and when necessary, we will intervene.

I assure you my fellow country men and women that we are exiting the darkness to enter a new and glorious dawn.

40. Now, I must get back to work in order to make this vision come true.

Thank you all for listening and may God bless Federal Republic of Nigeria.

*TEXT OF THE NATIONAL BROADCAST BY PRESIDENT BOLA TINUBU TO NIGERIANS ON CURRENT ECONOMIC CHALLENGES

 

What Is Government Doing About Fixing Refineries?

 

BY TEMITOPE AJAYI

 

A pattern has emerged in the arguments many of the partisan and ideological critics routinely make on television stations. There is this tendency to always muddle up facts and mislead the public, notably through willful ignorance.

One point that has been erroneously made is the view that the Federal Government is not doing anything about fixing the four refineries it owns. This view is incorrect.

The Federal Government, through the NNPC in 2021, signed a deal with an Italian company, Maire Tecnimont SpA, for a complete revamp of the two refineries in Port Harcourt at a cost exceeding $1billion. The contract that will be executed in three phases is expected to bring the two refineries to full production capacity. The first phase should have been delivered by April 2023, but the company recently announced a five- month extension. The second and third phases will be delivered in 32 and 44 months respectively. By the contact terms, we should have the two refineries in Port Harcourt fully working by 2025.

In February 2023, the NNPC also signed a $741 million deal with Daewoo Engineering & Construction company to rehabilitate the Kaduna refinery. NNPCL, according to Bloomberg, signed the contract with the South Korean firm. Under the terms of the agreement, Daewoo will restore production at the moribund 110,000 barrels per day facility to at least 60% production capacity by the end of 2024.

It should be said that the facts on the ground decline to support the view that the government is not doing anything to fix the refineries.  Nigeria cannot sustain the subsidy regime over the next two years when the rehabilitation of the refineries will be completed.

While it is good to have the refineries fully working alongside the Dangote Refinery, which will eventually make Nigeria a net exporter of refined petroleum products, local refining won’t translate to cheap pump price of petrol. From the pricing template of petrol import, over 90% of the price per litre is determined by price of crude oil in international market. Local refining will only help in reducing pressure on the demand for foreign exchange, eliminate the cost of shipping and port charges which may not translate to more than N10 per litre in savings.

Despite this, the government is pursuing local refinery rehabilitation for energy security and enhancement of crude as stated in the national oil policy.

 

-Ajayi, is Senior Special Assistant to the President on Media & Publici Affairs.

 

Tinubu’s Pragmatic Solutions, Edifying Actions

BY TUNDE RAHMAN

It’s now two months since Asíwájú Bola Tinubu has mounted the saddle as the President of the Federal Republic of Nigeria. One month in office may be considered too short a period of time for any objective assessment of the impact of the decisions and policy options of a government on the nation and the people, but the period can at least give an idea of where the government is headed, as they say that the morning is a pointer to what the day may look like. The two months of the Bola Tinubu administration in office has been marked by pragmatic solutions and ideas, decisive decisions and breath-taking actions at a fast pace such that some have nicknamed the President as “Baba Go-fast”.

The media have been awash with reports of all the remarkable decisions taken by the government, notably the removal of the humongous fuel subsidy through which some greedy oil merchants were cashing out at the expense of the poor the subsidy was meant to help, the unification of the multiple exchange rates where arbitrage walked on all fours and the signing into laws of landmark bills like the new electricity and Student Loans legislation.

With the new electricity law, states, companies and individuals can now generate, transmit and distribute electricity, meaning this important power has been developed down the ladder. Under the Student Loans law, indigent students will no longer drop out of universities on account of inability to pay school fees. They will now be offered loans to pay their fees and repay the government later.

During the period also, the President granted audience to important dignitaries like former military Head of State, General Abdulsalam Abubakar, state governors (he even inaugurated the National Economic Council headed by Vice President Kashim Shettima), humanists and philanthropists like Mr. Bill Gates and Alhaji Aliko Dangote who came to discuss issues around polio and malaria eradication, among others.

On the global stage, President Tinubu has also represented the country remarkably well. In his first official trip outside the country after assuming office, he attended the New Global Financing Pact Summit in Paris, France, where he announced to the whole world that Nigeria is back and ready for business. His administration will ease the structures and processes of doing business and ensure investors can repatriate their profits home anytime they want to. The President sounded a note of warning to unscrupulous civil servants and business people and other wayward Nigerians that it would no longer be business as usual in Nigeria.

On the sidelines of the summit, he met with Afreximbank President B. O. Oramah and AfDB President, Akinwunmi Adesina among others during which he extracted commitments from them about using facilities in their institutions to aid Nigeria’s economic development.

I have taken time to chronicle some of the giant strides recorded within just a month by the Bola Tinubu administration in order to underscore the significance of these initiatives and point out that these evidently important decisions and actions did not come about by accident or by chance. No, they were properly planned and designed. Though, some were part of the promises the President made to Nigerians during the electioneering and enunciated in his manifesto christened “Agenda for a Renewed Hope for Nigerians,” I dare say that these actions were born of courage, conviction, clear vision and empathy on the part of Mr. President.

The audacious courage and clear vision behind the solutions the President has offered in just four weeks and other remarkable decisions wherein he demonstrated good leadership remain largely clearly unstated by the media and it’s the focus of this piece.

For instance, only a bold and courageous leader with eyes on the country’s progress and economic development would frontally confront and remove the subsidy monster, which had sounded the death-knell of at least one president and defied the seemingly tough posture of another. Tinubu made the removal of the subsidy a campaign promise, telling the people that if elected, he would yank it off and free the money for the development of necessary infrastructure for the people. Many political aspirants in our climes would never toy with subsidy, talk less promise it’s removal before the election for fear that it may work against them at the poll. On assumption of office on May 29, the President removed the subsidy albatross on the nation’s economic neck, which gulped a whooping N3.36 trillion in the first half of this year.

The government is now moving speedily to put in place compensatory palliatives to cushion the biting effects of the subsidy removal on the masses. Some people reckon that the President should move a step further by going after the unpatriotic oil merchants and cabals who had turned the subsidy funds into their personal ATM. It is noteworthy that despite the inevitable and undeniable hardships the inescapable imperative of fuel subsidy removal has exposed the vast majority of Nigerians to, the people have obviously decided to exercise faith in the Tinubu administration and to give it the benefit of the doubt that its policies will ultimately turn out to manifest in the greatest good for the greatest number of the people.

Indeed, appraising the policy options and initiatives of President Tinubu in just one month, @Reuters (Reuters news agency) said in a tweet during the week: “New Nigerian President Bola Tinubu has moved at lightning speed in his first one month in office implementing a raft of radical changes aimed at finally unleashing the full potentials of Africa’s sluggish economic giant.”

There are, however, other aspects where Mr. President has demonstrated good leadership. One is in the appointment of the new service chiefs. When the appointments were announced, some unashamed ethnic jingoists, uninformed analysts and commentators had gone to town, particularly on social media, saying the South-east was left with no representation, implying this might be because the Igbo largely went with their kinsman, Mr. Peter Obi of Labour Party, during the election. But President Tinubu who knew he had done justice to all would not flinch. The new Chief of Naval Staff, Rear Admiral Emmanuel Ikechukwu Ogalla, hails from Enugu State, though some of his kinsmen now want to deny him his claim to genuine Igbo ancestry in the name of politics, claiming he is from the northernmost part of Igboland.

No less important in this regard is the appointment of the new Chief of Army Staff (COAS), Major-General Christopher Musa, a Christian from Southern Kaduna. News of his elevation reportedly elicited keen excitement and applause especially in Christian circles which, before the presidential election, had been misled into perceiving the APC’s Muslim-Muslim ticket as signalling an imagined ‘Islamization’ agenda should the Tinubu/Shettima ticket emerge victorious. And the appointment of the Acting Inspector General of Police, Mr. Kayode Egbetokun, from the South-West, the Chief of Air Staff, Air Vice -Martial H.B. Abubakar, from the North-West, the Chief of Army Staff, Major-General Taoreed Lagbaja, from the South-West and the Chief of Defense Intelligence, Major-General E.P.A Undiandeye, from the South-South, the long expressed grievances at the perceived lack of balance in the composition of the country’s top security hierarchy has been laid to rest. The Service Chiefs will thus surely enjoy greater pan-Nigerian trust, confidence and support to succeed in their challenging assignments.

Two, and perhaps more remarkable, is the case of the new Acting Comptroller-General of Immigration, Mrs. Caroline Wuraola Adepoju, because her case is intriguing. She had served meritoriously and waited patiently for her time to be CG to come, having enlisted in the service as Deputy Superintendent of Immigration Service in 1988. One of her immediate-past bosses, Mr. Mohammed Bandede, was to have retired in September 2020 but he was left in office till September 2021. Mr. Isah Jere Idris who took over from Mr. Bandede (though a DCG Non-Operations) was to retire in May 2022, but was given an extension of tenure twice to remain in office until May 29, 2023. When Mrs. Adepoju was eventually given a letter to become acting CG, it was a few days to her retirement and in fact the Monday, May 29, 2023 she was to assume duty was also the day she was due to retire from service. That was the day President Tinubu assumed office.

When the matter was brought to his attention in his office that day, the President placed a call to the Head of Service of the Federation, Mrs. Folashade Yemi-Esan, urging her to investigate the case of Mrs. Adepoju. She was then granted a three-month extension. President Tinubu was apparently moved by empathy and the need to ensure a woman who had served her country excellently got a deserving icing on her career cake. It was also a service to the womenfolk and a motivation to others that all hope is not lost when you serve your country well. Needless to point out that by the President’s commendable gesture, Mrs. Adepoju thus became the first from the South-West to emerge CG in the 60-year history of Nigeria’s Immigration Service. It is significant that all appointees of President Tinubu so far including those of Service Chiefs, Special Advisers and Senior Special Assistants feature men and women with impressive academic credentials and the requisite rich cognate experience while also fulfilling the President’s pledge to actively involve women and youths in his administration.

There is no doubt that President Tinubu’s mastery of the political terrain including the strategies and tactics of alliance-building and networking played a key role in the ruling party’s ability to ensure that its preferred nominees emerged as the leaders of the National Assembly. With Senator Godswill Akpabio and Senator Jubrin Barau, emerging as President and Deputy-President of the Senate, respectively and Honourable Tajudeen Abbas and Benjamin Kalu, as Speaker and Deputy Speaker of the House of Representatives, the stage has certainly been set for a harmonious working relationship between the Executive and the Legislature in the making and implementing of laws and policies for the benefit of the people.

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The order given by the President right from his first day in office for men of the Department of State Services (DSS) to immediately vacate the premises of the EFCC in Ikoyi, Lagos, which the former had invaded and cordoned off, was an early indication that the new administration would not tolerate the kind of inter-agency rivalry and conflicts that had been prevalent in the past. In the same vein, the suspension from office of the former Governor of the CBN, Godwin Emefiele, and the former Executive Chairman of the EFCC, Mr. Abdulrasheed Bawa, pending investigations of serious allegations against them is a clear indication that in the new dispensation, public office holders will be kept on their toes and be held accountable for their actions and inactions at all times.

During the period under consideration, the President, apart from the former Heads of State as well former and incumbent governors mentioned earlier, has also played host to frontline politicians, students union leaders, repentant militant leaders, civil society groups among others who visited him at the Presidential Villa. It has been an exceedingly busy and productive month in office for President Bola Ahmed Tinubu (GCFR) and Vice-President Kashim Shettima (GCON).

 

– Rahman, SSA media to President Tinubu