APC must rethink its economic policies to avoid failure, says Adebayo
The Social Democratic Party (SDP) candidate for the February 25 presidential election, Prince Adewole Adebayo, has criticized President Bola Tinubu's government for cutting fuel subsidies. He lamented that the decision had pushed more Nigerians into poverty over the past two months, warning that unless Tinubu, its managers and the All Progressives Congress (APC) rethink and have a back-up plan, the government will fail miserably.Given the effects of rising fuel prices at the pump due to the removal of subsidies, would you still call those who criticize the removal hypocrites? There are two types of people who criticize the removal of subsidies; some of them are hypocrites and some are consistent. Those who criticized the removal of subsidies, like myself and others, have reason to criticize the program. But those who supported anyone, any platform that said they would remove subsidies from day one are hypocrites.
Once you agree to throw a five-year-old from the 10th floor of a building, you can't say I'm surprised the kid broke his limbs. There's no way you're going to implement whatever policy they're implementing now that you're not going to have the same consequences. Economics does not allow cheating. You can cheat in politics, you can inflate your numbers in politics, but when it comes to economics, you can't. You need to adopt the right policies; if you don't adopt the right policies, the consequences of the wrong policies will follow.
When we talk about hypocrisy, it didn't start with the unions; it started with President Bola Tinubu himself who opposed former President Goodluck Jonathan when he had a lesser amount of subsidy adjustment and all took to the streets against it. And when they came to power, they went in the opposite direction, ended everything once and for all. It's not a political statement when you say people are hypocrites; we predicted all of this. We discussed it then. Nobody can claim not to have been aware that it will affect the cost of factors, if it affects the cost of factors, it will affect the cost of living. If this affects the cost of living, more people will fall into poverty.
Just look at the position they took before and look at the position they take now, there is nothing new in what happened, it is just the natural consequence of the action. And that's why during the presidential debate we were pushing for an alternative view, that they shouldn't do it, but they did it now, so nothing surprised me at all. In fact, it seems like this is just the beginning, except that drastic measures are being taken to get out of this line.
What measures would you recommend, in addition to the palliatives already promised? First, we should stop misusing the word palliative. The 8,000 naira stopgap they are talking about is a carryover from the existing 2023 budget. The postponement is the byproduct of the plan the Muhammadu Buhari administration left behind as to how it would handle the removal of subsidies. Even the £800m from the World Bank was brokered by the former government. Observers of politics should not behave as if they did not know it was in sight.
It seems that the government is not aware of what we call monetary neutrality. When you have no food, no transportation, no health insurance, giving yourself money is not going to increase the number of service providers or the value of real estate on the market. What it will do is that there will be waste, because the money will not be used well. When the money reaches the end users, it is useless to them in real terms because it has no assets to run with the money. Ultimately, this can cause a little inflation.
The way to go now is that if that is the consensus, as it seems the Nigerian elite is behaving as if there is no alternative to removing the subsidies, the subsidies are gone. I disagree with that though, but it is government policy and it seems that all major political parties and analysts agree with this bad policy. If you want to continue down this path, you disconnect people from the oil value chain. And the way to achieve this is, for example, from a transport and logistics point of view, to ensure that the price of petrol does not impact people's ability to move around.
That's why you see that in many cities, whether it's Singapore or London, ordinary people don't see the effect when the price of oil goes up or down, because the government has provided public transport that has been decoupled from it. Ordinary people are the easiest to pull out of this line. What do you mean when you said there could be further price dislocation if there is further crude price dislocation and further naira depreciation? There are three factors that affect it, and none of them are accidental; it's the by-product of...
The Social Democratic Party (SDP) candidate for the February 25 presidential election, Prince Adewole Adebayo, has criticized President Bola Tinubu's government for cutting fuel subsidies. He lamented that the decision had pushed more Nigerians into poverty over the past two months, warning that unless Tinubu, its managers and the All Progressives Congress (APC) rethink and have a back-up plan, the government will fail miserably.Given the effects of rising fuel prices at the pump due to the removal of subsidies, would you still call those who criticize the removal hypocrites? There are two types of people who criticize the removal of subsidies; some of them are hypocrites and some are consistent. Those who criticized the removal of subsidies, like myself and others, have reason to criticize the program. But those who supported anyone, any platform that said they would remove subsidies from day one are hypocrites.
Once you agree to throw a five-year-old from the 10th floor of a building, you can't say I'm surprised the kid broke his limbs. There's no way you're going to implement whatever policy they're implementing now that you're not going to have the same consequences. Economics does not allow cheating. You can cheat in politics, you can inflate your numbers in politics, but when it comes to economics, you can't. You need to adopt the right policies; if you don't adopt the right policies, the consequences of the wrong policies will follow.
When we talk about hypocrisy, it didn't start with the unions; it started with President Bola Tinubu himself who opposed former President Goodluck Jonathan when he had a lesser amount of subsidy adjustment and all took to the streets against it. And when they came to power, they went in the opposite direction, ended everything once and for all. It's not a political statement when you say people are hypocrites; we predicted all of this. We discussed it then. Nobody can claim not to have been aware that it will affect the cost of factors, if it affects the cost of factors, it will affect the cost of living. If this affects the cost of living, more people will fall into poverty.
Just look at the position they took before and look at the position they take now, there is nothing new in what happened, it is just the natural consequence of the action. And that's why during the presidential debate we were pushing for an alternative view, that they shouldn't do it, but they did it now, so nothing surprised me at all. In fact, it seems like this is just the beginning, except that drastic measures are being taken to get out of this line.
What measures would you recommend, in addition to the palliatives already promised? First, we should stop misusing the word palliative. The 8,000 naira stopgap they are talking about is a carryover from the existing 2023 budget. The postponement is the byproduct of the plan the Muhammadu Buhari administration left behind as to how it would handle the removal of subsidies. Even the £800m from the World Bank was brokered by the former government. Observers of politics should not behave as if they did not know it was in sight.
It seems that the government is not aware of what we call monetary neutrality. When you have no food, no transportation, no health insurance, giving yourself money is not going to increase the number of service providers or the value of real estate on the market. What it will do is that there will be waste, because the money will not be used well. When the money reaches the end users, it is useless to them in real terms because it has no assets to run with the money. Ultimately, this can cause a little inflation.
The way to go now is that if that is the consensus, as it seems the Nigerian elite is behaving as if there is no alternative to removing the subsidies, the subsidies are gone. I disagree with that though, but it is government policy and it seems that all major political parties and analysts agree with this bad policy. If you want to continue down this path, you disconnect people from the oil value chain. And the way to achieve this is, for example, from a transport and logistics point of view, to ensure that the price of petrol does not impact people's ability to move around.
That's why you see that in many cities, whether it's Singapore or London, ordinary people don't see the effect when the price of oil goes up or down, because the government has provided public transport that has been decoupled from it. Ordinary people are the easiest to pull out of this line. What do you mean when you said there could be further price dislocation if there is further crude price dislocation and further naira depreciation? There are three factors that affect it, and none of them are accidental; it's the by-product of...
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