Onanuga: Nigeria May Have Ceased To Exist From June 2023 If Subsidy Remained, FG Is Working To Ease Economic Hardships

The Special Adviser to President Bola Ahmed Tinubu on Information and Strategy, Bayo Onanuga, has said that the removal of fuel subsidy was very important and imminent as Nigeria would have had it a lot worse economically if the subsidy on petroleum products had remained.

The Special Adviser made this statement in an interview with ARISE PRIME TIME on Monday night, where he discussed and reviewed President Bola Ahmed Tinubu’s policies and decisions he had made for the Nigerian government since his tenure began in May 2023.

Onanuga said that all the major candidates, during the 2023 election campaign period, had decided that the subsidy on petroleum products must be removed as it had become a problem to Nigeria’s economy.

He said that Buhari’s administration had already set a plan in motion to remove subsidy by the end of June, further explaining that although the government knew that the removal of subsidy was going to be a problem, President Tinubu “probably felt that there is no need to postpone the evil day”, prompting him to make the announcement of the removal of fuel subsidy on the day of his inauguration.

“At that time, it was justifiable, because it had become an albatross, by the end of May or so, the government was already owing the NNPC about N4 trillion which it was not willing to pay, it didn’t have the resources to pay,” he said.

Onanuga went on to say, “There might not be any country from June 2023 if that subsidy had remained. Things would have been far worse than we have it today. So it was a very very important decision, and government has been making efforts since then to try and see what they can do to improve things, to ease the burdens of Nigeria. 

“The President empathises with our people, he understands that they are going through pain and he’s been saying so that he really understands the pain that people are going through and he is making efforts to make sure that he reduces the pain.”

Speaking more to the rising rate of inflation in Nigeria and the economic challenges faced, Onanuga said that what is being experienced in Nigeria is “hyper-inflation”, as the prices of goods and commodities in the market were increasing on a more rapid basis that it should.

He said, “Some of those price increase we are witnessing are very very artificial, everybody is just increasing prices. Because if you align it with the exchange rate, even if you want to dollarize your economy, you cannot really support the kind of very steep price increase we are going through in this country.”

Onanuga then said that more questions and grievances should be directed towards the state governments and local government councils rather than the federal government as the FG had increased the allocation of funds given to the lower tiers of government, but unfortunately, as of late, there is nothing to show for it.

Explaining why President Tinubu decided to float the naira, Onanuga said, “Under the last administration (of the CBN), according to reports in the media, the CBN was spending about $1.5 billion every month to support the naira at the official rate, which was about N450 to a dollar or so, whereas, in the parallel market, it was going for almost double that. So you find a situation where some people who are close to the former governor, who were close to some people in government, were collecting money at the official rate and then doing what people call an economic crime, arbitrage, selling this money, roundtripping, selling it in the unofficial market and then making a lot of money for doing nothing. These are some of the things that the government tried to stop.”

He also said that at some point, due to the gap in the official window and the parallel market, the FDI had ‘dried up’ as people were not interested in investing in a place where there was no stability in the exchange rate. However, with the floating of the naira, the gap had reduced significantly, and investments were getting secured again.

“If we can sustain the stability we have now, if we can ensure that we don’t have the volatility anymore, I’m sure the naira will begin to wax stronger and stronger and probably go to the rate that Governor Cardoso envisages it will be instead of the rate we have now,” he said.

Onanuga then noted that President Tinubu is concerned by the increased levels of insecurity that have plagued Nigeria in more recent times, and that the president is committed to setting up forest and coastal guards in the country.

Onanuga, however, reacted to the governors of the People’s Democratic Party (PDP) who came out to call on President Tinubu to solve Nigeria’s economic issues as he said, “I welcome the intervention of the PDP governors. With what they’ve said today, they’ve shown concern, and they’ve also shown that the problem we are going through is not just an APC problem, it’s a problem that should concern all Nigerians. And I think they have behaved very responsibly and they should be commended.

“Our country will never be like Venezuela. Our country is being run by responsible people and they are trying day and night to ensure that we don’t fall into that kind of trap like Venezuela, like Zimbabwe, and even Argentina, countries that have had the kind of experience that we are going through.”

He then said that he hopes Tinubu’s administration will take these suggestions and grievances in stride and bring about solutions to the economic hardships in Nigeria.

Ozioma Samuel-Ugwuezi

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