Subsidy removal, naira volatility…, key issues Tinubu’s speech will address

In his speech Monday evening, President Bola Tinubu is expected to address the concerns of Nigerians over the weakening naira against the dollar as well as announce temporary measures to cushion the impact of the removal of subsidies which sent retail pump price reeling.

A source close to the Presidency tells BusinessDay that the President has agreed to an intervention that will rein in prices which looks to rise to above N700 per litre following the weakening of the Naira. The intervention being proposed will target measures that will keep prices stable. Some analysts have called for removing some port charges and an intervention that will rein in prices in places far from the ports.

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The president is also expected to announce that will see the Central Bank in the coming days will unveil a slate of policies designed to reduce the volatility of the naira and increase supply into the market. The president is expected to shift the rethoric from exchange rate unification to keeping a managed float of the naira. Analysts have condemned the continued restriction of a list of 40 items from accessing foreign exchange on the Investors and Exporters window. It is not clear yet, if this will be lifted at this time.

The president will also provide an official response to the threat by labour unions to embark on an industrial action. The president is expected to urge the unions to exercise restraint while outlining how the government market reforms approach is superior to labour’s socialist-oriented plan of keeping subsidies.

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The Nigerian Labour Congress (NLC) has threatened that all its members and affiliate unions will embark on an industrial action leading to withdrawal of services from Wednesday August 2, a development that would cripple the economy and further plunge many into misery.

The Nigerian government is keen to avert the strike but there are whispers that the government is working hard to prevent being held hostage by the unions. It is deepening engagement with rival groups and communicating the reasons for its reforms many of which their value cannot be realised in the short-term.

While many Nigerians acknowledged that some of these reforms are long overdue, especially removal of subsidies, the refusal of the Tinubu government to cut governance costs and manage the opulence of government officials makes his reforms a hard sell for many Nigerians.