Doyin Okupe, a leader of the Labour Party (LP), claimed that once the fuel subsidy was eliminated, President Bola Tinubu still had a lot of rivers to cross.
On Thursday, Okupe made a statement via the official X (formerly Twitter) handle.
President Bola Tinubu “actually hit the ground sprinting; showing much determination, zeal, commitment, and courage,” according to the statement. By eliminating gasoline subsidies and balancing the currency rate, he has made two incredibly audacious moves.
“There is no question that this is causing the population great suffering and misery. However, the President will still need to make more audacious moves in order to fully ground these measures and lessen the suffering of the public.
“Oil reserves could lose all meaning in around 20 years. Given the volume of exports to our main source of foreign exchange (90%) and Nigeria’s current allocation of less than 2 million barrels per day, both the nation’s development and the welfare of its citizens are threatened. Nigeria has a population of over 200 million people and is currently experiencing strangling economic conditions.
Nigeria can lower the price at which it sells crude outside of OPEC while simultaneously increasing daily shipments to at least 3 million barrels.
The statement continues, “This will raise accruable forex revenue by up to 200% or more, enabling the CBN to furnish the banks with more cash. In the face of excess liquidity in the supply of foreign exchange, the Naira will significantly outperform the Dollar.
“The current scenario, where Nigeria receives only 40% of the accruable revenue from oil sales and the oil majors receive 60% of that revenue, is no longer fiscally or economically wise or sustainable.
“Saudi Arabia uses its own Aramco to drill its own oil, and it keeps all sales proceeds. Even if we might need to increase investment in oil processing, we should renegotiate with the oil majors so that the ratio shifts in Nigeria’s favor to at least 60:40. We might not be able to do this right away.
“The NNPC can no longer do its duties completely or fulfill all of its commitments to the Nigerian people. As it relates to the NNPC as a business, I lean toward advising that the President and his team look into and analyze the Atiku Abubakar model.
“Most of the neighborhood refineries can still be made to work for the ensuing fifty years. The large inflow of funds from the equalization of the FX regime should be used in part to renovate our refineries once and for all. Reputable international contractors should be selected for the refurbishment program using the best acceptable international bidding procedures.
“This should be carried out by a special presidential committee that will adhere to the best standards of honesty and transparency, outside the purview of the NNPC. For investors interested in constructing petroleum refineries in Nigeria, particularly modular refineries, the government must right away relax licensing requirements.
The current generation of Nigerians involved in crude oil refining, who are dispersed all over, should no longer be pursued by task forces but rather legally integrated into the downstream industry and granted licenses to manufacture and sell petroleum products under supervision.
The government must use all of the tools at its disposal to prevent crude oil theft once and for all and keep pipeline vandalism nationwide to a bare minimum.
“Despite our leadership of ECOWAS during this time, the Nigerian government should encourage the use of diplomatic crisis management approaches and look for ways to use its influence with the organization to end the crises in Niger as quickly as possible as a precursor to the urgent steps that need to be taken towards the activation of the plan to build the trans-sahara gas pipeline from Nigeria to Algeria and Europe, through Niger and Algeria.The government must use all of the tools at its disposal to eradicate crude oil theft once and for all and severely curtail pipeline vandalism across the nation.
Nigeria has the ninth-highest gas resource in the world, therefore if this can be done in the next three years, gas sales to Europe will generate more than $30 billion in revenue annually.
“The government will need to reconsider the complete elimination of gasoline subsidies in order to alleviate the current misery in the nation and provide assistance, especially to the poor, until some of the aforementioned goals may be reached.
In the interim, a portion of the surplus from the currency equalization can be used to pay for a supplemental budget for the National Assembly, covering whatever portion of the subsidy regime the government determines will be adequate to provide the intended respite from the current difficulty.
“The NNPC immediately deposits significant sums of money into the federation account after the foreign exchange system is equalized. For the first time ever, 1.5 trillion dollars were made available for distribution across the three levels of government last month.
According to the consequence, each level of government will have the necessary financial buffer to raise the minimum wage to at least N60,000 per month. The remaining surplus revenues can be used for strategic infrastructure and human development initiatives, particularly at the state and local government levels, as well as the above-mentioned repair and renovation of refineries.
He stated, “Furthermore, the more export trades our small and medium scale enterprises and business concerns within the country undertake will boost and improve the percentage of inflow of Dollars from non-oil exports. The weakening of the naira also has a major economic advantage of making our goods and services cheap abroad.
“Government must seize the situation to encourage the export if anything and everything by individuals and enterprises.
“Such encouragement may include payment of special grants per tonnage of goods exported.
In the same vein, a major international drive and campaign must be undertaken by the CBN to encourage Nigerians in diaspora to use the official platform for remitting money home from abroad. This may be in form of waving commissions and fees chargeable on transfers.
With an inflow of nearly $25b per annum from the diaspora community, Dollar supply to the CBN will increase to a large extent.
“Power generation and distribution is a major player in our economy; creating employment and improving the living standard of people generally. With this in view, I will strongly recommend that government shifts the level of power generation without official licensing from 1 MW to 5 MW. The cost of generating power from various sources is about $1-1.2m per MW on the average.
“With this singular policy, up to 1,000 local investors can enter into the power generation market in less than 1 year thereby boosting our power generating potential by more than 5,000 MW in 1 year. If this policy is followed with more liberalization of the power act of 2022, the need for generating sets by millions of Nigerians will drastically reduce by more than 80%.
This will also further cause a decline in the demand by the populace especially the lower class for petrol to power small generators either for business or leisure.
“In conclusion, I personally believe that President Bola Tinubu is a thinker and an achiever.
I have therefore enumerated the points above just to stimulate thoughts and actions and draw attention to areas which I consider if exploited, will add value to the plans of the current administration, increase revenue inflow to the country, reduce hardship and combat poverty.”