By Suleiman Umaru
President Bola Ahmed, Tinubu, who incidentally was a former governor of Lagos state, appears to have won the support of the world Leaders, World Bank and International Monetary Fund, IMF, over the Administration’s fuel subsidy removal and unification of the country’s multiple Foreign exchange rates.
Recall that for much of the eight years of the former President Muhammadu Buhari’s Administration, the World Bank and the IMF, had persistently piled up pressure on the Nigerian government to scrap the fuel subsidy, described as a drain pipe to the economy and unify the multiple exchange system ‘’to attract foreign investment into the country’’.
Until President Tinubu, took the bold initiative to scrap the fuel subsidy and unify the country’s multiple exchange rates, Malpas-led World Bank, had consistently made it clear to the embattled Gdwin Emefiele, the then CBN, governor, now in Department of State Security, DSS custody, at their various meetings in Washington DC, Capital of the US, that the ‘’multiple exchange rate system is complicated and not as effective as it would be if there were a single exchange rate system’’.
Malpas, immediate past President of the World Bank , who has spear- headed the move for the removal of the subsidy on the importation of Premium Motor Spirit, PMS, popular, petrol into the country and ending multiple exchange rates system, was said to have commended the former Lagos state governor for taking the ‘’concrete steps to scrap the Nigeria’s harmful government subsidies on petrol importation into the country and multiple exchange rates’’.
Malpas, who could not hide his feelings had said that ‘’these are important steps towards the country’s currency stability, lower inflation and reduced corruption in the Africa’s most populous country’’.The World Bank former President was emphatic that the most useful thing for a developing country like Nigeria to do is ‘’to have a single exchange rate system that is market –based, stable over long periods of time that would attract investment’’.
The Bank officials has justified the unification of the country’s multiple foreign exchange rate system on the grounds that ‘the country faces trade barriers that has continued to distort its trade with other countries across the world and capital flows’’.
The IMF, on its part was said to have made a move in February, 2023, to force the ruling All Progressive Congress, APC, government of the then Katsina state born Nigerian President to deliver on its commitment ‘’to removing fuel subsidies by mid-2023. The US, based money lender was said to have highlighted the need for the Nigerian government to embark on the economic reforms ‘’to create the needed policy space, put public debt on sound footing and reduce vulnerabilities.
There are indications that the Buhari’s Administration had spent close to N11 trillion , between June, 2015 and May ,2023, to subsidise fuel importation by the Nigerian National Petroleum Corporation, NNPC, now baptized Nigerian National Petroleum Company Limited, with the passage of the Petroleum Industry Bill, PIB, by the National Assembly that was signed into Law by Buhari , in August , 2021.
It is on record that in 2022, alone, the then Buhari’s Administration had spent $9.7 billion or about N4.40 trillion, alone, on fuel importation into the country. The massive importation was said to have been adversely affected by the Russian-Ukraine war on the world oil market as it jumped to 13.5%, compared to the 2021 figure. Former President Goodluck Jonathan was said to have proposed to end the fuel subsidy, calling it a’’ fraudulent policy’’ but that was how far he could go.
Also,former President Buhari had contended at various interviews, both within and outside the country, that ‘’there was no fuel subsidy’’, claiming that that the economic strategy only gave the Jonathan’s Administration a way to grease the wheels of Corruption.
Richard Montgomery, the British High Commissioner to Nigeria, may have spoken the mind of Rishi Sunak, the country’s Prime Minister wen he said that ‘’the removal of the petrol subsidy and the foreign exchange reforms by the Tinubu’s Administration would ’’ramp up bilateral relations between the two countries’’, particular, in ’’the areas of economic engagements’’. He had said that ‘’the two big economic decisions’’, taken within the last three weeks by the Tinubu’s Administration are important ‘’to attract investments into Nigeria’’.
Montgomery may have gladdened the heart of Vice President Kashim Shettima, and former governor of the north eastern state of Borno and, whom he has met recently, other Nigerians when he revealed that the British’s ministers and businesses in the finance, banking and investment sectors of the economy are responding positively to the Nigerian President’s first economic decisions’’.
An elated British High Commissioner was said to have expressed confidence that the economic reforms that had been embarked upon by the former Lagos state governor’s Administration in at the national level will ‘’ help ‘’ place the Nigerian economy on a path of growth’’, noting that the United Kingdom , UK, now see Nigeria as a ‘’big opportunity going forward’’.
The Punch had reported that prior to the unification of the multiple exchange rate policy, over 50 multinational companies and foreign investors had exited Nigeria over the last eight years. Some of the notable multinational companies that were said to shut down and sold their assets in Nigeria include Etisalat, Supercor Industries; Arabi Industries; Rola Industries’ ExxonMobi; Tiger Brand’ HSBC and UBS; Mr Price Group Ltd; Woolworths; Shoprite and Game Stores owned by Massmart Holdings Limited.
This is in addition to Brunel services plc; Iberia Airline; Surest Foam Limited; Mufex; Framan Industries; Moak Industries; Stone Industries; MZM International; Nipol Industries; Solo Industries; Quick born Industries and InterContinental Hotel Group.
Most of the Companies, The Value News finding shows has found it very difficult to access the US dollars and other foreign currenciesat the official market to import their raw materials, machineries and other items for use in their factories. More worrisome was the fact that even after ‘’ successfully’’ doing business in Nigeria, during the Buhari’s era, the multinationa companies still found it difficult to repatriate proceeds trpped at the CBN, to their home countries.
As a prelude to opening the Nierian to foreign investors, the Nigerian President, who has arrived at the Palais Brongniart in Paris, Capital of France, the venue of the New Global Financial Pact Summit, whichseeks to establish a system that will be more responsive, just and inclusive as well as fight inequalities, finance the climate transition diversity protection and move closer to achieving the United Naion, UN’s Sustainabe Development Goals, SDGs,
The Global Summit organised by President Emmanuel Macron of Fra is expected to be attended by no fewer than 40 World Leaders and several multilateral financial institutions.
Officials of the World Bank, IMF, African Development Bank, AfDB, European Union, EU, African Union, AU and UN, are also expected at the summit which is an opportunity for the Lagos state born Nigerian President to network in a bid to attract greater foreign investment to the country .
The former Lagos state governor who would not want to miss the opportunity provided by the Global Summit to advertise the ongoing economic reforms embarked upon by the Administration in the last three weeks would want ‘’to network with the international financial corporations, institutions that would facilitate direct foreign investment, FDI, into Nigeria. Already, countries like France, US and Switzerland, have shown interest to take advantage of the foreign exchange reforms to expand their economic activities in Nigeria.
The bold economic initiatives adopted by the Tinubu’s Administration in the area of the economy within the last three weeks may have encouraged many foreign nations and investors to show more interest in the affairs of Nigeria in shoring up the country’s economy which had remained stagnant over the years