NAIRAMETIRCS
Peter Obi, Labour Party’s presidential candidate in the 2023 election, has once again described fuel subsidy as an organized crime.
Obi on Monday made this statement while featuring on Arise TV’s ‘The Morning Show’. He stated that although he agreed with the decision to remove the fuel subsidy, he would have taken a different approach in implementing the policy.
- “Fuel subsidy is organized crime. I said it repeatedly that it should be removed. For me, the approach would have been, is to remove the corruption and criminal side of it and remove the excess demand.
- “By doing this, you would have reduced it by 50 per cent. The remaining 50 per cent is what we would have been able to, after consultation with various stakeholders to find a way in an organised manner, remove and show the proceed of the gains of the removal to be invested in critical development areas” he said.
The ex-governor of Anambra State also commented on the palliative initiatives the Federal and State Government has implemented since the removal of subsidy.
Obi said that the gains from removing subsidies should have been invested in critical areas such as education, health and poverty alleviation programmes.
He said,
- “The proceeds of the removal or the gains of the removal need to be invested in critical development areas such as education, health and pulling people out of poverty. People need to see the transparency of transferring from here to there. When you do it in an organized manner, with proper palliatives that are well-structured, you would have been able to see Nigerians go along with you.”
FX Crisis and Solution
Responding to a question on the challenges in the foreign exchange market, Obi reiterated that things could have been done differently.
He explained that the pressure on the FX is due to the lack of sufficient supply to float the naira against the dollar.
According to the former governor, the government should have consulted their economy team in ensuring the supply of FX, albeit putting in place initiatives to encourage export.
- “You can’t float a currency you don’t have supply with. It’s like building a non-gated house in a criminal-ridden society. You have to have a defence mechanism. Nobody floats what you don’t have a supply for. I believe that now that we have new CBN leadership, they have to look at the overall monetary policy. It’s again not something you announce haphazardly. It’s something you look at critically. Nobody floats his currency without having an adequate supply. When you don’t have adequate supply, there will be pressure and criminality. We should have worked on eliminating those criminality and excesses in our FX regime,” he said.
Speaking on how his party would have approached the conundrum, he stated that they would have opted for the devaluation of the naira instead of leaving it open to market forces by floating the currency.
- “What we would have done is devalue the currency to about 600 or thereabout while trying to manage what you have and encouraging exports. I can tell you not even in the developed world has anybody left their currency to market forces because you might not be able to control it. After all, you cannot reverse your policy.
- These are announcement defects that would have been well thought through by a proper economic team and consultation,” he added.
