- Safiu Kehinde
Former Nigerian Vice President, Atiku Abubakar, has explained what he would done differently if he were to be Nigerian President.
The 2023 Peoples Democratic Party’s Presidential candidate took to his X handle on Sunday, evaluating the current administration’s policies and economic reforms while suggesting what he claimed would have been better than President Tinubu’s reforms.
In what he described as trial-and-error economic policies, Atiku faulted the Tinubu’s decision to float the Naira while also removing subsidy and introducing a cost-reflective electricity tariff at the same.
This, according to him, overkilled the economy as he stressed that removal of subsidy of PMS without a stable foreign exchange rate was a counterproductive move.
Meanwhile, he revealed that he would have embarked on a sequential reforms to achieve fiscal and monetary congruence as laid out in his policy document titled ” My Covenant with Nigerians”.
“We would have planned better and more robustly: My journey of reforms would have benefited from more adequate preparations; more sufficient diagnostic assessment of the country’s conditions; more consultations with key stakeholders; and better ideas for the final destination.
“We would have been guided by my robust reform agenda as encapsulated in ‘My Covenant With Nigerians’, my policy document that sought to, among others, protect our fragile economy against much deeper crisis by preventing business collapse; our document had spelt out policies that were consistent and coherent.
“We would have sequenced my reforms to achieve fiscal and monetary congruence. Unleashing reforms to determine an appropriate exchange rate, cost-reflective electricity tariff, and PMS price at one and the same time is certainly an overkill.
“Add CBN’s bullish money tightening spree. As importers of PMS and other petroleum products, removing subsidy on these products without a stable exchange rate would be counterproductive.” He wrote.
Atiku further analyzed his plan towards fiscal reform which he claimed would have started with the elimination of revenue leakages arising from governance.
He also harped on effective communication and consultation with stakeholders to learn, negotiate, adapt, and modify, among other policy goals.
The former Vice President further disclosed that he would have initiated a rather robust social protection programme that will over genuine support to the poor and vulnerable than running what he tagged “palliative economy”.
On specific measures he would have taken, Atiku said he would place special focus on security, reforming the security institutions through a Special Presidential Welfare Initiative for security personnel while also adopting alternative approaches to conflict resolution and launching $10 billion worth of Economic Stimulus Fund to support MSMEs.
“Commenced on day one, the reform of security institutions with improved funding, and enhanced welfare. My Policy Document had spelt out a Special Presidential Welfare Initiative for security personnel that we would implement.
“Adopted alternative approaches to conflict resolution such as diplomacy, intelligence, improved border control, deploying traditional institutions, and good neighbourliness.
“We would have launched an Economic Stimulus Fund (ESF), with an initial investment capacity of approximately US$10 billion to support MSMEs across all economic sectors.
“How would this have been funded? Details are in my Policy Document.
“Alongside the ESF, we would have launched a uniquely designed skills-to-job programme that targets all categories of youth, including graduates, early school leavers as well as the massive numbers of uneducated youth who are currently not in education, employment, or training.
“To underscore our commitment to the development of infrastructure, an Infrastructure Development Unit (IDU) directly under the President’s watch would have come into operation.
“The IDU will have a coordinating function and a specific mandate of working with the MDAs to fast track the implementation of the infrastructure reform agenda within the framework provided herein.
“The IDU will hit the ground running in putting the building blocks for our private sector driven Infrastructure Development Fund (IDF) of approximately US$25 billion.” Atiku wrote.
On subsidy removal, he admitted to be an advocate for the end of subsidy regime as he claimed that its administration is corruption ridden.
However, he stressed that he would approached subsidy by first tackling corruption within the Nigerian National Petroleum Company (NNPCL) while privatizing all state-owned refinery to boost Nigeria’s export capacity and meet OPEC’s standard.
“Yes, I have always advocated for the removal of subsidy on PMS because its administration has been mildly put, opaque with so much scope for arbitrariness and corruption. Mind boggling rent profit from oil subsidy accrued to the cabals in public institutions and the private sector.
“I would have prioritized the following:
“First, tackling corruption. Fighting corruption should have commenced with the repositioning of the NNPCL, which is a huge beneficiary of the status quo. Its commitment to reform and capacity to implement and enforce reforms is suspect. The subsidy regime has provided an avenue for rent seeking, and the NNPCL and its guardians will be threatened by reforms.
“Second, paying particular attention to Nigeria’s poor refining infrastructure. We are by far the most inefficient OPEC member country in terms of both the percentage of installed refining capacity that works and the percentage of crude refined.
“We would’ve commenced the privatization of all state-owned refineries and ensure that Nigeria starts to refine at least 50% of its current crude oil output. Nigeria should aspire to export 50% of that capacity to ECOWAS member states.” He continued.
In contrast to Tinubu’s complete removal, Atiku maintained he would opted for gradual phase out of subsidy which he claimed was used during his tenure under former President, Olusegun Obasanjo.
“Third, adopt a gradualist approach in the implementation of the subsidy reforms. Subsidies would not have been removed suddenly and completely.
“It is instructive that when I was Vice President, we adopted a gradualist approach and had completed phases 1 and 2 of the reform before our tenure ended.
“The incoming administration in 2007 abandoned the reforms, unfortunately. The majority of the countries that review or rationalize subsidy payments adopt a gradualist approach by phasing price increases or shifting from universal to targeted approach (Malaysia, 2022 and Indonesia, 2022 -2023).
“In many EU economies, complete withdrawal often takes 5 years to effect. The gradualist approach allows for adjustments, adaptation and minimizes disruptions and vulnerability.” Atiku said.
On foreign exchange, he condemned Naira floating, labelling it as an overkill.
However, his suggestion did not completely rule out floating as he said he would have initiated a managed-floating system by encouraging the Central Bank of Nigeria to adopt a gradualist approach of FX management.
“I also made a commitment to reform the operation of the foreign exchange market.
“Specifically, there was a commitment to eliminate multiple exchange rate windows. The system only served to enrich opportunists, rent-seekers, middlemen, arbitrageurs, and fraudsters.
“What would I have done? A fixed exchange rate system was out of the question because it would not be in line with our philosophy of running an open, private sector friendly economy.
“On the other hand, given Nigeria’s underlying economic conditions, adopting a floating exchange rate system would be an overkill. We would have encouraged our Central Bank to adopt a gradualist approach to FX management. A managed-floating system would have been a preferred option.” Atiku added.