Prince Adewole Adebayo was the presidential candidate of the Social Democratic Party in the 2023 general elections. In this interview, he speaks on the effects of fuel subsidy removal and unification of the exchange rate on Nigerians.
Given the biting effects of the increase in fuel pump price due to the removal of subsidy, would you still label those criticising the removal of subsidy hypocrites?
There are two types of people who criticise the subsidy removal. Some of them are hypocrites and some are consistent. Those who criticise subsidy removal like me and other people, have grounds. But those who supported anyone, any platform that said they would remove subsidies from day one are hypocritical. Once you agreed to throw a five-year-old child from 10 floors of a building, you cannot say I am surprised the child broke his limbs. There is no way you will implement the policy they are implementing now that you are not going to have the same consequences. Economics does not admit cheating. You can cheat in politics, you can inflate your numbers in politics, but when it comes to economics, you can’t. You have to take the right policies. If you don’t take the right policies, the consequences of the wrong policies will follow.
When we are talking about hypocrisy, the hypocrisy didn’t start with the labour unions, hypocrisy started with President Tinubu himself who opposed former President Goodluck Jonathan when he had a smaller amount of subsidy adjustment and all of them went on the streets against it. And when they came to power, they went in the opposite direction and finished everything once and for all. It is not a political statement when you say people are hypocritical. We predicted all this. We were discussing it then. Nobody can pretend that they are not aware that it will affect factor cost. If it affects factor cost, it will affect the cost of living. If it affects the cost of living, more people will go into poverty.
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What steps do you recommend as the government is also taking steps about palliatives?
First, we should stop misusing the word palliative. Policy watchers shouldn’t behave as if they didn’t know what was in the offing. It appears the government is not aware of what we call monetary neutrality. When you have no food, you have no means of transportation, when you have no medicare, throwing money at you is not going to increase the number of service providers, is not going to increase the value of real goods in the market. What it is going to do is that there would be wastage; the money will not be well used. When the money gets to the end user, it is useless to them in real terms because it does not have goods to chase with the money. In the end, it may cause a little bit of inflation.
The way to go about it now is to delink the people from the value chain of petrol. And the way to do that is, for example, from the transportation and logistics point of view, you make sure that the price of petrol does not impact the ability of people to commute. That is why you see many cities, whether it’s Singapore or London, what you see is that the common people don’t see the effect when the price of petroleum goes up or down because the government has provided public transportation that has been delinked from that. The common people are the easiest to take off that line.
Are you saying the policy by the Tinubu administration of unification of the foreign exchange market and removal of the fuel subsidy is to help the friends of the government?
I am not saying it pejoratively. In economics, everything is about choice. There are many alternative routes to development.
Nigeria is a resource-rich country. I am not saying that because of the number, I am saying it because of the quality of people we have. Nigeria is rich in manpower. I think it is not too late for the government, starting with President Tinubu and co, to rethink and have a backup plan because I have a feeling and I am saying it with every sense of responsibility that if they go the way they are going, they will fail woefully. Not because they hate the people but because they are adopting models that never worked. It will surprise even President Tinubu that in the past two months, more people have entered into poverty and are yet to succeed in lifting five people out of poverty. The measures they are taking now will not help the economy. Subsidy is one out of about 2000 government programmes that require spending government money. I studied them when I was running for president in order to cut costs. If you are looking at the top 100 money wasters, subsidy for petrol is not one of them. One of them is establishment costs- running the National Assembly, Presidency. Another is military spending. This is a major waste of government money. We need the military but not the waste that is there. The third is the management and funding of the JV (Joint Venture) and production-sharing contract. The fiscal management of taxation, the waivers they give, which is a government programme. And the way we subsidise foreign exchange. There are more than these I have stated though.
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