Bismarck Rewane, a Nigerian economist and member of the Nigerian Economic Advisory Council that acted in an advisory capacity to the government of former President Muhammadu Buhari, has insisted that the fuel subsidy removed by President Bola Tinubu has not been removed but only reduced.
Speaking on Channels Television’s 2023 Democracy Day programme aired on Monday to discuss Nigeria’s growing democracy, Rewane explained that what the current government actually did was reduce subsidy.
He insisted that if the subsidy was removed, the price of fuel would be a lot higher than what it is today, especially with the Nigerian National Petroleum Corporation (NNPC) Limited selling within a band limit of between N488 and N568.
“The truth is that subsidy have been reduced,” Rewane said. “If the subsidy has been removed, then the price of PMS as you see it today will be much higher than what it is.”
“Policy reform is not the same thing as institutional reform,” he continued, saying that a holistic change in the institution of government is needed to reap the dividends of democracy.
He advised that the monetary, fiscal, justice, security, and other key institutions of government needed reform.
“You cannot do partial equilibrium—you cannot fix the interest rate and leave the exchange rate alone. You cannot fix the petroleum subsidy and leave debt alone, so it has to be a comprehensive package,” he added, noting that the government has to handle it all at once instead of taking one side and abandoning the other.
He also advised that a mindset change is required, especially for those in power, insisting that those in positions of power must be held accountable for their actions.
Rewane also advised the current administration to be truthful about the facts about the country, insisting that a truthful presentation of the things in the country would help manage expectations, manage resources, and find solutions to the most challenging problems in the country.
“Without optimization of resources, we would have optimal outcomes, and that is where we are going,” he said.
He added that with the “fuel subsidy removal,” inflation should go as high as 25 percent in June and 28 percent in July,” he noted, insisting that any policy makeup that hopes to reduce interest rates with this kind of inflation won’t succeed.
Speaking further, the Economist added that current realities would encourage Nigerians to save more and that loan interest rates would continue to surge. He noted that more loans will go bad and investment will increase when the country eventually has a stable exchange rate system.
He also advised that the era of impunity has to be stopped and capable hands with high credibility have to be employed to manage government offices, as this would help rebuild lost confidence in government.
