Idris: Fuel Subsidy Removal, Forex Windows Unification Aimed at Rescuing Nigeria’s Economy

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[@ABCD1234-user-x3v]

They claim the policies will save Nigeria from imminent collapse. What good are policies that will save “Nigeria” if it is killing “Nigerians”?

[@bolagenius]

The Nigerian problem is not subsidy removal or floating of Naira. The approach of floating a currency has allowed more foreign exchange to flow towards the country. It creates foreign direct investment and foreign portfolio investment. You guys are only mentioning the negatives of the policies and not the positives. Nigerian problem is that we are all corrupt and have failed to step up local production to attract more foreign exchange. We like to complain and not take action but are always looking to blame the next man or the next government. I still admit that this government still needs to rejig certain things, but they are on the right path. Policies take sometime to become visual.

[@obehiokojie4066]

The policies are good. However, I am not sure the government did a good job with identifying and understanding the underlying issues that gave rise to the problems in the first instance. If they did, they may have failed to develop appropriate mechanisms to address them. You can see from the policy flip-flops of the government. On the forex front, petrol products import is a huge drain on the nation's forex. Now, one would have expected that with a private refinery, Dangote, coming on stream, the government would support it to quickly commence the production of PMS for the local market to plug in the drain on the nation's stock of forex. However, what we see is that the government seems to prefer import to local production. Another issue is the inability of the government to ramp up oil production to boost forex inflow. Why can't the government address the issue of crude oil bunkering and smuggling despite the resources at its disposal? Ramping up oil production is one low hanging fruits that the government can cash in on to boost the nation's forex. Floating in one fell swoop the forex in an import dependent nation was a recipe for disaster. One would have expected the government to address the constraints to local production, especially agricultural production, which, of course, you and I know is insecurity. The actions of the government have not helped matters. Wasteful spending, corruption, and counter-productive policy measures between the fiscal and monetary authorities. While the CBN is trying to tame inflation on the one hand, the fiscal authority is flooding the system with cash. How does this make sense? It doesn't. There is a lack of deep research on issues, poor coordination, and lack of coherence within the federal government and among the various tiers of government: federal, state, and LGAs. With these and many other factors not mentioned here, policy measures will most likely deviate from expectations. And until there is a proper understanding of the underlying issues and concrete steps taken to address them, the policies taken by the Tinubu administration may not yield the expected results.

[@obehiokojie4066]

I do hope you understand the difference between FDI and FPI,right? What FDI has flowed into Nigeria? When the existing ones are packing and leaving. What has flowed in is FPI, which is hot money and very erratic. They come in to take advantage of the high interest environment. By the way, how much of it has come in since the floating of the forex? What Nigeria needs is more FDI that will translate to the setting up of factories, bossoting of manufacturing and production activities leading to jobs that in turn will put money in the hands of citizens to spend to reboot the economy. We have got to be strategic about these things. You don't just go at IMF/World Bank policies because you want to make them happy. No. You have to tweak policies to accommodate your local peculiarities. This is what China and some other nations have done so well. Gradual and systematic adoption and implementation of policies and programs such as would not allow things to spiral out of control like we are seeing now. The government seems confused. They are still paying subsidy behind the scene. The CBN keeps trying different mix of forex policies with a view to addressing the forex problem. They just re-introduced the RDAS just a few days ago. These are clear signs that things aren't working.

[@solomonkayode2385]

Talk is cheap just because they are in front of cameras