Two Nigerian ministers have openly expressed concern over the harsh effects on the economy of fuel subsidy removal and floating of the Naira, twin policies introduced by their principal, President Bola Ahmed Tinubu.
The Minister of Budget and Planning, Atiku Abubakar Bagudu and his counterpart in the Ministry of Agriculture Senator Abubakar Kyari, picked holes in the economic policy of the present administration at a public forum on Friday.
Both spoke at a session with the joint Committee of the Senate: the Committee on Finance; Banking, Insurance and other Financial Institutions Committee and Appropriation Committee.
The senators grilled the ministers for over three hours, seeking explanations for the current economic hardship, particularly inflation, exchange rate crisis, insecurity and food scarcity that have forced Nigerians to start protesting publicly in some states of the federation.
Speaking to the committee, Bagudu, the Minister of Budget noted that the removal of fuel subsidies instigated a high cost of petroleum with its ripple effect on transportation of goods and high cost of farm produce.
The former acting national chairman of the All Progressives Congress (APC) lamented that the devaluation of the naira had put neighbouring countries at an advantage to buy cheaper farm products from Nigeria which are now consequently smuggled across the border by peasants.
He said: “What we are faced with today is the undocumented export of food to our neighbouring countries. Today, one CFA is N2.50, that is to say, 100 CFA is N2,200. That used to be N400 a few years ago. When you look at our neighbouring countries, all four neighbouring countries around us, the CFA is their currency and because of the devaluation of the naira, our food is the cheapest around the neighbourhood. So, you find a lot of undocumented exports, smuggling across our porous borders to these neighboring countries.”
The minister, who said the Federal Government might be compelled to again seal up the borders against the country’s neighbours, expressed concern over unrestrained exportation of certain farm produce by nationals of China, India and Turkey who earned foreign exchange from it while the country earns nothing in return.
He said: “The other angle that we have over the period is the unavailability of foreign exchange. A lot of investors, Indians, Chinese, Turkish, that are operating in this country buy our crops that are sought after outside, like soya beans and buy them at exorbitant prices just to earn foreign exchange. When they go outside there to earn foreign exchange, the worst part is that most of these monies are not repatriated back to us.
“Export is a good thing for us but when you don’t earn the foreign exchange and it is not repatriated back to us, and government doesn’t have any income from it, I am sorry, that is not a good sign.
“So, what we are trying to do here is to ramp up production. I think it is an issue of economics, between supply and demand, but unfortunately we have to see how we can secure food for our 230 million citizens and at the same time if this economic situation continues, then you have to seal up the borders which is against the ECOWAS issue.”
Kyari’s counterpart in the Ministry of Budget and Planning, Atiku Abubakar Bagudu, noted that the removal of fuel subsidy is also affecting planting by farmers.
Bagudu said: “The benefits of fuel subsidy reforms have to be supported by measures that will guarantee food production and stability.
“From our perspectives, particularly from budget and planning, there are places today in about 18 states in the country where you can still plant rice for the dry season farming, including the constituency of the chairman of the national planning in five local governments where, if care is not taken, not for reasons of insecurity, 70 percent of the planting areas might not be cultivated because of fuel cost.
“It is the same thing in a number of places in the constituency of my brother, Senator Adamu Aliero. The balancing of the reforms and ensuring the necessary measures are implemented urgently in order to ensure that we support the reforms is the point made by Senator Aliero. And the commendable act of removing fuel subsidy needs to be supported by measures that support domestic production in order to achieve the full impact.”
As the senators grilled members of the Economic Management Team, they asked the Federal Government to end the pain of Nigerians by applying urgent, workable solutions in its economic recovery policies.
The team, which was led by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, appeared before the joint Senate committee co-chaired by senators Sani Musa and Adetokumbo Ashiru.
Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cadoso, was also in attendance.
