The President’s Independence Day speech failed to rise to the occasion. Let me address the topics he spoke on in his address.
The President said reforms have happened in the PMS subsidy and foreign exchange space; which reforms is Mr. President speaking about?
Can anyone post a copy of a policy document, circular, or letter from the Executive branch (not NNPC Ltd) stating the PMS subsidy is over?
PMS Subsidy and Forex Quandary
The subsidy is essentially back because oil prices have risen internationally, but local PMS price has stayed the same, implying the difference (subsidy) is covered somewhere.
On Forex, the CBN wants to eat her cake and have it. They attempted a managed float but retained Capital Controls on the already banned 46 or so items, so how is that a float with a willing buyer and willing seller?
The N25k provisional wage increase to workers should have been made much earlier. This increment should have been announced on May 29th, immediately after the “subsidy is gone” quote by Mr President. Food Inflation has already whipped away this N25k.
The Infrastructure Support Fund is a ring-fenced FAAC account. The President has unilaterally withheld funds that should go to States and LGAs into this fund unconstitutionally.
So, who monitors this fund? Which projects will it fund? A good idea is to use these funds for seed funding of regional projects that cross boundaries, like railway lines connecting States.
The CNG buses are commendable; they kill many birds, use local gas, are clean, create local jobs, and improve productivity. The next step should be CNG “Keke” mopeds for use in smaller towns.
Economic Concerns and Unaddressed Issues
Sadly, nothing was said about the insecurity in the farmlands in the hinterlands; this has a direct impact on food inflation. Nigeria can only reduce its double-digit inflation if it reduces food prices.
Nothing was also said about the theft of Nigerian crude oil in the Niger Delta, which has reduced Nigeria’s export earnings leading to massive borrowing. Nigeria cannot stabilize its exchange rate to the USD without exporting more crude oil.
Overall, the executive appears stuck on the economic front; the President is still looking backwards and not forward.
Nigerians want a plan; they want to hear about big and transformative ideas that trigger excitement and induce positive consumer sentiment, which leads to private-sector investment.
Nothing in today’s speech will induce any Board of Directors to invest.
Written by Kalu Aja.