Atiku Abubakar, presidential candidate of the Peoples Democratic Party, says he will remove the controversial petrol subsidy, which could cost Nigeria up to $9 billion in 2022, a development that could plug a drain on the economy.
Atiku, who acknowledged that oil will continue to be key in turning Nigeria’s beleaguered economy around, said years of under-investment in infrastructure and large-scale theft have depressed oil production and brought untold misery.
“I will remove the fuel subsidy; within the first 100 days in office, we should be able to make a decision.” He promised to provide a comprehensive road map on how the proceeds from the petrol subsidy removal will be invested.
Attempts at privatising the state-owned Nigerian National Petroleum Company, whose shares are owned by the federal government, were muddled, he said. “I will have to study the so-called privatisation and see how we can review it and make sure that it conforms with our expectations which is realising as much revenue as possible.”
The Nigerian economy is reeling from the effect of paying billions daily on subsidy. Nigeria recorded N16 trillion from crude oil sales between January to September, according to government data, but nothing often gets saved.
Godwin Emefiele, governor of Central Bank of Nigeria (CBN), said last month that the official foreign exchange receipt from crude oil sales into Nigeria’s official reserves has dried up steadily from above $3 billion monthly in 2014 to $0.
Analysts say lower oil production arising from crude theft and subsidy payments for refined petrol crimp foreign exchange receipts from crude oil sales.
“Subsidy payments, operation costs and low oil production are factors that limit the remittance of foreign earnings to CBN,” Etulan Adu, an oil and gas production engineer, said.
According to data from the National Bureau of Statistics (NBS), Nigeria earned N5.6 trillion in the first quarter, N5.9 trillion in the second quarter and N4.6 trillion in the third quarter of 2022.
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Apart from Atiku, Peter Obi of the Labour Party and Bola Tinubu of the All Progressive Congress have all pledged to remove petrol subsidies. But these promises have failed to spur confidence because even Muhammadu Buhari said in 2014 that subsidy payments were fraudulent, won elections and continued paying.
Past governments have been unable to take the difficult decision to remove subsidies on account of fear of popular outrage and threats by labour groups.
Meanwhile, the Buhari government said it would stop paying for subsidies in June next year.
Atiku also pledged to reform the country’s multiple exchange rates with “a unified exchange rate or a maximum of two” in conjunction with the central bank. Some $10 billion would be allocated to small and medium-sized enterprises to create jobs, money he claimed would be raised by the privatisation of state-owned refineries and savings from fuel subsidies.
With a public debt of $103 billion, he said he would have “to approach our creditors to see how we can renegotiate and reschedule repayments”.
He said he also plans to cut down on public sector expenditure, which he described as “expenditure not in favour of development”.
On crime and security, Atiku said he would increase the number of police officers and other security service personnel and “train and equip them better”. He is also considering introducing state policing, a departure from Nigeria’s centralised force.
He said he planned to form a government of national unity that would include opposition politicians. When pressed if there could be a job for Obi, his running mate in 2019, he responded: “Why not?” Asked in what capacity, he said: “Let’s win the elections before thinking of roles people can play.”
