Presidency, Obi clash over fuel subsidy, forex policies,
By Udeme Akpan, Energy Editor
The Presidency and presidential candidate of the Labour Party, LP, in the 2023 elections, Peter Obi, clashed yesterday over the fuel subsidy removal and foreign exchange policies of President Bola Tinubu’s administration.
While Obi noted that both policies were haphazardly implemented by the government to plunge the country into economic crisis, the President accused Obi of being too desperate for power and lacked understanding of governance.
Although the former Anambra State governor agreed that the removal of fuel subsidy was necessary, he, however, quarrelled with the manner it was executed.
He also asked the Tinubu administration to account for the money saved so far from the removal of the subsidy and also show proof of its expenditure on such infrastructure as education, health and poverty reduction, as it claimed.
Recall that President Tinubu had, on his inauguration on May 29 2023, announced the removal of fuel subsidy and flotation of forex exchange, triggering the economic crisis the country had been facing, especially with regards to inflation and devaluation of the naira.
In an interview on Arise Television, Obi said while the removal of fuel subsidy was necessary, the policy should have been implemented in a “gradual and organised” fashion.
He said: “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 the fuel subsidy. What is wrong is the haphazard way it was announced and implemented.”
He acknowledged that the subsidy regime was riddled with “criminality and corruption” and needed to end, but criticised the current administration’s approach, describing it as poorly executed.
Obi questioned the management of the funds saved from the subsidy removal, saying, “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.’’
Obi said a fair pricing template should have been negotiated with stakeholders to cushion the impact on citizens.
He also addressed the decision to float the naira, saying the policy wasn’t inherently wrong but must be backed by economic productivity.
“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 said.
Since President Bola Tinubu’s announcement on May 29, 2023, ending the fuel subsidy, the price of petrol has surged from N190 to over N850 per litre. The administration also adopted a currency float policy, allowing market forces to determine the naira’s value.
Obi desperate for power, ignorant about governance — Presidency
But replying Obi yesterday, Special Adviser to the President on Policy Communications, Daniel Bwala, described the Labour Party’s presidential candidate as a ‘shallow’ personality who was not well grounded in issues of economics and governance.
Bwala, in a statement posted via his official X account, stated that he was surprised Obi could agree with the economic policies of President Bola Tinubu, especially on fuel subsidy removal and the unification of foreign exchange, but emphasised that it was obvious the former Anambra governor and other opposition figures were simply after taking over power, all the while.
He wrote: “Is anybody watching Peter Obi on Arise TV? He agreed with our policy of removal of subsidy and unification of the foreign exchange; he claimed he would have done it better than us in an ‘organised manner’
“He was asked what the ‘organised manner ‘ is.’ He played with words, yet to arrive at agreeing with us.
“Anybody with a rational mind knows these guys are just looking to grab power, but they don’t have any alternative agenda.
“He seems to have very shallow knowledge of economics and governance. Remember, this is even an interview anchored by a member of his Obidient movement.
“That’s why you don’t hear ‘I put it to you’ and no barking like a rottweiler; Yet ‘if it didn’t Dey it didn’t Dey.”
Petrol subsidy removal generates $84bn, 40 roads — NOA
In what seemed an account of receipt from fuel subsidy removal, the National Orientation Agency, NOA, weekend, said the federal government has so far generated $84 billion from the removal
The agency said the funds generated have enhanced the funding 40 critical road projects across the country in the past two years.
In its policy explainer, titled ‘’Two Years Later: Key Benefits of Subsidy Removal,’’ NOA, stated: “For decades, particularly since the advent of the current democratic dispensation, a major albatross of the federal government had been the oil subsidy regime.
“Successive administrations’ zeal to tame the menace had proved a fiasco while the economy continued to haemorrhage profusely. However, by 2015, many Nigerians had reached a consensus that it was high time the subsidy was consigned to the dustbin of history, as the subsidy budget in 2022 rose by 700 per cent to N4tn, the highest ever in subsidy history.
“Between 2005 and 2022, successive governments spent $84.39bn on fuel subsidies. These subsidies consumed over 70 per cent of potential federal revenue, pushing the country to the brink of bankruptcy.
But with the bold decision to remove it, Nigeria is now saving billions and investing in real infrastructure.
“Removal of subsidy not only saved the entire economy from imminent collapse, it also rescued several states of the federation from bankruptcy. Upon the take-off of this incumbent administration, Nigeria was spending 97 per cent of its revenues to service debts until its debt profile exceeded N100tn.
“Fuel subsidies consumed more than 70 per cent of the potential Federal Government’s revenue, forcing both the central and state governments to resort to heavy borrowings to finance their budgetary expenditures, but the removal helped the country to save billions.
“States now swim in inflows of funds, paying salaries as at when due despite more than 100 per cent minimum wage increase and drastically reducing their debt portfolios because subsidy removal puts more money into their hands.
“In 2023, the 36 states of the federation and 774 local government areas got a total of N6.16tn as FAAC allocations, implying a 28.6 per cent increase from the N4.792tn they received in 2022, but in 2024, revenues rose astronomically to N15.26tn as a result of subsidy withdrawal, giving the states and 774 LGAs N9.58tn, which was N3.42tn higher than what they received in 2023.
“Thus, as records from the Debt Management Office have shown, in the last 18 months, the total domestic debt profile of the 36 states and FCT had declined from N5.82tn in June 2023 to N3.97tn in December 2024. This implies that subnational administrations had repaid N1.85tn debts within one and a half years.
“As part of the gains of subsidy withdrawal, for the first time in decades, Nigeria’s capital expenditure in the 2025 Appropriation Act is higher than its recurrent annual spending. Successive administrations had always allocated 70 per cent of their annual budgets to recurrent spending, leaving only a paltry 30 per cent for the capital budget.
“However, the incumbent administration provides N23.96tn for capital expenditure in the 2025 budget. This is N10tn higher than N13.64tn for recurrent expenditure. The impacts of investments in road infrastructure have been the ongoing commissioning of 40 road projects in commemoration of two years of President Tinubu’s administration.”
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The Presidency and presidential candidate of the Labour Party, LP, in the 2023 elections, Peter Obi, clashed yesterday over the fuel subsidy removal and foreign exchange policies of President Bola Tinubu’s administration.
The post Presidency, Obi clash over fuel subsidy, forex policies appeared first on Vanguard News.
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