I would have ended fuel subsidy, floated naira

By Chinelo Obogo

Former Anambra State governor and 2023 presidential candidate of the Labour Party (LP), Mr. Peter Obi, has said he would have removed petrol subsidy and floated the naira if he was elected president. But he clarified that unlike the incumbent President Bola Tinubu, his approach would have been different. According to him, he would have implemented the policies in a “gradual and organised” manner as against the haphazard method of the incumbent administration.

President Tinubu, during his inauguration on May 29, 2023 at the Eagle Square, Abuja, had announced the removal of subsidy on petroleum otherwise known as petrol. His controversial subsidy is gone statement immediate spiked the pump price of petrol from N190 to N500. The price later soared to over N1,000 and later dropped to about N880 in Lagos and higher in other states.

The Tinubu-led administration also floated the nation’s currency, a situation which saw the value of the local currency is determined by market forces.

But over two year after President Tinubu “subsidy is gone” pronouncement, Obi has questioned the whereabouts of the funds saved from the policy, noting that the gains should have been investment in “critical infrastructure.” He lamented that critical areas of development have not witnessed any significant improvement since the removal of the subsidy. He added that he would have negotiated with operators on a fair pricing template for the product.

“I have consistently maintained that I would have removed the fuel subsidy. If you go to my manifesto, it is there and the steps I would have taken in an organised manner.

“There is nothing wrong with the removal of fuel subsidy. What is wrong is the haphazard way in which it was announced and implemented.

“Since we were told that we removed it because we don’t want to borrow and that the funds will allow for investments in critical infrastructure. Billions saved. Where is it? Where is it invested in critical areas of development?

“Everybody knows critical areas of development — education, health, and pulling people out of poverty. Have any of these three improved? No. There is nothing wrong in floating and devaluing your currency. You do this when you have productivity. In all of this, I would have done the same thing in an organised manner.”

He added that he would have ramped up the country’s production capacity in the agriculture and manufacturing sectors before floating the currency.

Weighing in on the floating of the naira, he said: “There’s nothing wrong with floating your currency. There’s nothing wrong with even devaluing your currency. But you do this when you have productivity.

What devaluation or floating does is that your currency becomes, in terms of value, low. You attract investment. Your products become more marketable. But where we are unproductive, you have nothing to sell. So it’s a double whammy. So in all this, I would have done the same thing in an organised manner.”