Peter Obi, the Labour Party’s presidential candidate in Nigeria’s 2023 general elections, has reaffirmed his support for both the removal of fuel subsidies and the floating of the naira.
However, he emphasized that his method would have been significantly more systematic and deliberate than the approach adopted by the current administration.
In an interview on Arise television, Obi addressed public skepticism regarding his economic positions, asserting that while the reforms themselves were necessary, the way they were carried out under President Bola Tinubu’s government lacked adequate structure and foresight.
“I have consistently maintained that I would have removed the fuel subsidy,” Obi said, referencing his campaign plans. “If you go to my manifesto, it’s there. Steps I would have taken to do it in an organised manner. There was nothing wrong in the removal of subsidy. What is wrong is the haphazard way in which it was announced and implemented. Everybody knows that the subsidy regime was a solution of criminality. There was a lot of corruption, which they needed to get out of. Do it in an organised manner.”
Obi, a former governor of Anambra State went further, challenging the claims of fiscal savings that were meant to accompany the subsidy’s removal. He questioned the allocation and utilization of the supposed gains.
“And since you’re doing it for savings, we’re told we’re doing it because we don’t want to continue to borrow, to continue the subsidy. And the removal of it will be able to have available funds to be invested in critical areas of development. With all these things, billions saved, where is it? Where is it invested in those critical areas of development?”
Turning to the subject of exchange rate policy, Obi criticized the decision to float the naira without ensuring that the country had the productive capacity to support such a move.
“There’s nothing wrong with floating your currency. There’s nothing wrong with even devaluing your currency. But you do this when you have productivity. What devaluation or floating does is that your currency becomes, in terms of value, low. You attract investment. Your products become more marketable. But where we are unproductive, you have nothing to sell. So it’s a double whammy. So in all this, I would have done the same thing in an organised manner,” Obi noted.
President Tinubu had unveiled the controversial reforms during his inauguration on May 29, 2023. His declaration marked a decisive break with previous subsidy policies and signaled a new direction for the nation’s fiscal strategy.
“Fuel subsidy is gone,” Tinubu proclaimed, signaling a commitment to ending what many viewed as an unsustainable financial drain.
Despite being a major oil producer, Nigeria has long faced challenges in refining sufficient crude for domestic consumption. This has led to heavy dependence on imported fuel, which was previously sold at lower, subsidized prices set by the government.
While these subsidies offered some relief to ordinary Nigerians, they came at an enormous cost. In 2022 alone, Nigeria spent approximately 4.3 trillion naira on subsidies. By mid-2023, an additional 3.36 trillion naira had already been budgeted for the same purpose.
Efforts to eliminate the subsidy in the past were frequently met with fierce resistance, including mass protests and industrial action. Tinubu’s announcement, though bold, has sparked ongoing debate over its execution and its impact on the broader economy.
