Economy: I would have consulted widely, cut costs, tackled corruption in NNPCL- Atiku

….Privatise refineries, achieve 50% local refining capacity
….Says his administration would have dedicated $25bn to infrastructure

Amidst growing criticisms of the President Bola Tinubu-led administration’s economic policies, former Vice President Atiku Abubakar, on Sunday, enumerated measures which he said would have served as better alternatives for tackling current challenges.

In a statement entitled, ‘What we would have done differently,’ the Peoples Democratic Party (PDP) presidential candidate in the 2023 general election blamed current challenges on inadequate preparation and insufficient consultations with relevant stakeholders.

Atiku, while x-raying the subsidy removal and the measures put in place to address the negative effect, said he would have sequenced his reforms to “achieve fiscal and monetary congruence.”

Atiku described the “unleashing reforms to determine an appropriate exchange rate, cost-reflective electricity tariff, and PMS price at one and the same time” as ‘an overkill.’

“Add CBN’s bullish money tightening spree. As importer of PMS and other petroleum products, removing subsidy on these products without a stable exchange rate would be counterproductive.

“We would have planned better and more robustly: My journey of reforms would have benefited from more adequate preparations; more sufficient diagnostic assessment of the country’s conditions; more consultations with key stakeholders; and better ideas for the final destination.

“We would have been guided by my robust reform agenda as encapsulated in ‘My Covenant With Nigerians’, my policy document that sought to, among others, protect our fragile economy against much deeper crisis by preventing business collapse; our document had spelt out policies that were consistent and coherent.”

In more specific terms, the former vice president stated that he would have undertaken extensive reforms of the public sector institutions to maximise reform impact.

Atiku also suggested the pooling of funds to support and bail out ailing state-owned enterprises as part of measures to re- stabilise and revive them for jobs creation.

He also believes that the current administration has not done enough to tackle the challenges of insecurity, noting that he would have placed special focus on security viz.

“We would have launched an Economic Stimulus Fund (ESF), with an initial investment capacity of approximately US$10 billion to support MSMEs across all economic sectors.

“Alongside the ESF, we would have launched a uniquely designed skills-to-job programme that targets all categories of youth, including graduates, early school leavers as well as the massive numbers of uneducated youth who are currently not in education, employment, or training.

“To underscore our commitment to the development of infrastructure, an Infrastructure Development Unit (IDU) directly under the President’s watch would have come into operation.
“The IDU will have a coordinating function and a specific mandate of working with the MDAs to fast track the implementation of the infrastructure reform agenda within the framework provided herein. The IDU will hit the ground running in putting the building blocks for our private sector driven Infrastructure Development Fund (IDF) of approximately US$25 billion.

“To engender fiscal efficiency and promote accountability and transparency in public financial management, we would have committed to a review of the current fiscal support to ailing State-Owned enterprises. We would’ve also begun a process review of government procurement processes to ensure value-for-money and eliminate all leakages.

“We would have initiated a review of the current utilization of all borrowed funds and ensured that they were deployed more judiciously.”

Abubakar, who stated that he had always backed the need for the removal of subsidy on PMS because its administration has been mildly put, opaque with so much scope for arbitrariness and corruption, noted that “mind boggling rent profit from oil subsidy accrued to the cabals in public institutions and the private sector.”

He however differed from the current administration’s approach, saying that he would have started by first tackling corruption.

“Fighting corruption should have commenced with the repositioning of the NNPCL, which is a huge beneficiary of the status quo. Its commitment to reform and capacity to implement and enforce reforms is suspect. The subsidy regime has provided an avenue for rent seeking, and the NNPCL and its guardians will be threatened by reforms”

“Second, paying particular attention to Nigeria’s poor refining infrastructure. We are by far the most inefficient OPEC member country in terms of both the percentage of installed refining capacity that works and the percentage of crude refined.
“We would’ve commenced the privatization of all state-owned refineries and ensure that Nigeria starts to refine at least 50% of its current crude oil output. Nigeria should aspire to export 50% of that capacity to ECOWAS member states.”

“Third, adopt a gradualist approach in the implementation of the subsidy reforms. Subsidies would not have been removed suddenly and completely. It is instructive that when I was Vice President, we adopted a gradualist approach and had completed phases 1 and 2 of the reform before our tenure ended.”

Atiku, who noted that the administration that succeeded them in 2007 abandoned the reforms, explained that the majority of the countries that review or rationalise subsidy payments adopt a gradualist approach by phasing price increases or shifting from universal to targeted approach, citing Malaysia, 2022 and Indonesia, 2022 -2023.

“In many EU economies, complete withdrawal often takes 5 years to effect. The gradualist approach allows for adjustments, adaptation and minimizes disruptions and vulnerability.

“Fourth, implement a robust social protection programme that will support the poor in navigating the cost-of-living challenges arising largely from reform implementation.

“We would’ve invested the savings from subsidy withdrawal to strengthen the productive base of the economy through infrastructure maintenance and development; to improve outcomes in education and healthcare delivery; to improve rural infrastructure and support livelihood expansion in agriculture; and develop the skills and entrepreneurial capacity of our youth in order to enhance their access to better economic opportunities.”

Atiku, also commenting on multiple exchange rates, said the practice only serve to enrich speculators. “I also made a commitment to reform the operation of the foreign exchange market. Specifically, there was a commitment to eliminate multiple exchange rate windows. The system only served to enrich opportunists, rent-seekers, middlemen, arbitrageurs, and fraudsters.

“A fixed exchange rate system was out of the question because it would not be in line with our philosophy of running an open, private sector friendly economy.
“On the other hand, given Nigeria’s underlying economic conditions, adopting a floating exchange rate system would be an overkill. We would have encouraged our Central Bank to adopt a gradualist approach to FX management. A managed-floating system would have been a preferred option.”