Subsidy Removal, Unification Of The Exchange Rates Will Rebuild   Nigerian’s Economy – World Bank

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.

President Bola Ahmed Tinubu

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’’.

Akinwumi Adesina: AfDB President Says Bank Earmarks $520 Million For SPZs Program In Nigeria

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 .

Leave a Reply

Your email address will not be published. Required fields are marked *