By Elizabeth Chukwuma and Lateef Adegbite
Those criticizing the removal of the controversial fuel subsidy and unification of the multiple exchange rates by President Bola Ahmed Tinubu, of the ruling All Progressive Congress may have to do a rethink. The World Bank which has been at the vanguard for the removal of the subsidy over the years had said the Nigerian government decision is painful, particular, the subsidy removal, as a litre of the product has jumped from N184.00 as May 29, 2023, to over N500.00.
Garba Shehu, a former senior Special Assistant to the immediate Past President Muhammadu Buhari who had said that ‘’no responsible leader would have removed the subsidy the way The Lagos state born Nigerian President has done to add to economic pain of the people. He had said that the former Katsina state born Nigerian President has opportunity of removing the subsidy but decided to put it hold because it has the February 25, 2023, Presidential election to win.
He noted that if the erstwhile Nigerian President has gone ahead with the earth –shaking economic reforms the party would have been thrown out of office. He had said that if the former Nigerian President could damn the consequences to remove electricity, fertilizer, Hajj/Christian Automotive Gas Oil, AGO, popular diesel, Aviation and Dual Purpose Kerosene, DPK, subsidies which touches the life of many, nothing stops him from removing that of Petrol subsidy to which the former Lagos state governor is being praised to high havens by the multilateral financial institutions.
He has cited the fertilizer subsidy alone, which was said to have taken between N60-N100 billion annually, of the country’s meagre resources subsidize. He was emphatic that the former Nigerian President may not have removed the subsidy on Petrol but’’ he removed every other budget busting, egregious, economic –growth crushing subsidy along the way’’.
Shehu, the former Media and Publicity Aide to Buhari , could not have said anything less to protect the bad image of the ex-Nigerian Leader who believes that ‘’ ruling Nigeria is one of the hardest challenges in life’’ has urged Nigerians to fully support Tinubu’s Administration to succeed .
Subham Chadhuri, the World Bank country Director in Nigeria, who may have spoken the mind of Ajay Banga, the Bank President had said that the removal of fuel subsidy by the Tinubu’s Administration is projected ‘’to achieve estimated fiscal gains of about N3.9 trillion this 2023, fiscal year for Nigeria. The fiscal gains, he further said are expected to reach over N21 trillion between N2023 and 2025.
The World Bank Economist who did not rule out the fact the petrol subsidy removal is likely to an increase in inflation in the upcoming months before contributing to disinflation in the medium term in the country had said the lending Bank has a concessionary funding to Nigeria which currently stands at over N10 billion of the North American country of the United States dollars.
Chadhuri, the World Bank Economist who gave an insight to the $800 million loan from the Bank to Nigeria at the tail end of the Buhari’s Administration had said that it was approved for the country in December 2021, a time when the former Nigerian President contemplated the removal of the petrol subsidy. The World Bank Economist may have used the opportunity of the event organised by the Bank to assess the nation’s economy in the last six months on Tuesday, June 27, 2023, to speak out.
He has made it clear to those that cares to listen that the $800 million is a loan to the Nigerian government and not grant as being speculated in certain quarters. He is right. The former Nigerian President who had soft-pedaled on the petrol subsidy removal until his last days in office was said to have sent a letter to the Ahmad Lawan led Senate seeking approval to take a loan to the tune of $800 million from the World Bank to cushion the effects of subsidy removal.
The World Bank country Director in Nigeria who had said that there is nothing in the present Tinubu’s Administration taking the bull by the horn to remove the petrol subsidy which has been a drain pipe to the economy over the years has thrown his weight behind the Nigerian government economic reforms within the last one moths, particular, the petrol subsidy removal and exchange rate s unification.
Chadhuri, who could not hide his feelings over the country multiple exchange rates approach that was implemented by the Buhari’s Administration for the eight years he ruled Nigeria through the embattled Godwin Emefiefele led Central Bank of Nigeria, CBN, ‘’ impeded investment and growth in the cnation’s economy as well as contributed ‘’to inflation and undermined efficiency of the country‘s monetary and fiscal policies’’.
The World Bank may not be the only institution for now that is concerned about the rebuilding of the battered Nigerian economy by supporting the economic reforms that have been initiated by the Present government. Akinwumi Adesina, a former minister of Agriculture and Rural Development during former President Goodluck Jonathan’s Administration and now President of the African Development Bank, AfDB, may have gladdened he heart of Nigerians when he said that ‘’ the Bank will support the Nigerian government , under the leadership of Tnubu in improving the country’s agricultural and power sectors’’.
The AfDB, President who was said to have given the Bank’s assurance after a meeting with the Nigerian President on the sidelines of the New Global Financing Pact Summit hosted by President Emmanuel Macrron, in Paris, France that the Bank’s Special agro-industrial processing zones, SPAPZs, in the country, would gulp $520 million . The Bank was said to earmarked seven states which incluse Cross river, Imo, Kaduna, Kano, Kwara, Ogun, Oyo and Abuja, the Federal Capital Territory, FCT, in the first phase of the implementation of the multi-million dollar, project.
He was said to have told the Nigerian President that the Bank will support to his efforts , his vision and to his government with regard to access to funds ‘’to make sure that the agro- industrial processing zones project actually gets accelerated’’. The AfDB, agro-industrial processing project that was said to have been launched in Nigeria on October 24, 2022, is expected ‘’to stimulate agricultural transformation in Nigeria’’.
Mohammed Abubakar, the immediate past minister of Agriculture and Rural Development had said that the SAPZs will significantly drive the modernization of the Agricultural sector in Nigeria, reduce the country’s food imports, drive value addition in staple food crops and create new economic zones of wealth and jobs creation the rural areas.
Katherine Meighan, Vice President of the International Fund Agricultural Development , IFAD, an agency of the United Nations, has expressed the importance of the private sector as a key growth engine for rural economic under the AfDB, Special agro-industrial processing zones in Nigeria.
There are indications that nineteen more state governments across the country have indicated interest in also establishing specual agro-industrial processing zones under the AfDB SPAZs second phase. As a prelude to encouraging the Private sector to take advantage of the AfDB SPAZs program to invest in the nation’s agricultural sector, Onyebanji Onyelaran- Oyeyinka, a Professor and Special Adviser to AfDB President, was said to have highlighted the investment ecosystem of the SPAZs and the opportunities inherent in the areas for the private sector.
Meighan, the IFAD, Vice President, had said that that the agency will maximize the SPAZ benefits for small scale producers and the private sector investors in with the nation’s priorities. The Bank of Industry, according to informed sources was said to have declared its willingness ‘’to support capacity building for Small and Medium Scale Enterprises, SMEs, located in the seven zones across the country in this phase of the implementation of the SPAZs program in Nigeria. The Bank was said to have promised to bring affordable and long-term financing to private sector investors ostensibly to see hundreds more SPZs springing up across the country because ‘it is a tested and trusted model’’.
The immediate past Nigerian President had promised to invest $18.05 million on the SPAZs project, while strong supports are expected from the state governments, the private sector, and other development partners. Ajayi Kadir, Director General, Manufacturers Association of Nigeria, MAN, had said that for the AfDB, SPAZs, to succeed, state government s must insulate investors from land politics and take adequate care to ensure that the environment is right.
The MAN Director General was said to have made it clear to the state governors, that’’ the major attraction for investors in the SPAZs program, is the opportunity to be competitive’’. Let us hope Nigerian investors will cue in to Arise Integrated Industrial Platforms which is operating a $1 billion forestry –based Nkok special economic zone in Gabon.
Suren Abeywickrema, the Vice President, Arise IIP, had said that that zone as at today has more than 100 international investors who were said to have an additional investment of over $1.7 billion .