Obadiah Tohomdet, one-time senior communications specialist with the World Bank and Managing Director, SIMANS Strategic Communications Ltd, Abuja, spoke with JOSEPH INOKOTONG on a wide range of issues on the economy and what Nigerians should expect in 2022. Excerpts:
There are fears that this year, 2022, is likely to be a more turbulent economic year for Nigeria. One, the budget fundamentals look unrealistic; debts will further escalate because the federal government cannot make up to half of its revenue projections, meaning that it will have to borrow more. In addition, the FG has allegedly pledged to the International Monetary Fund (IMF) to remove fuel and electricity subsidies and it will try very hard to remove it in 2022. With all these do you think these fears are real?
I will like to focus on the issue of petroleum subsidy. Let us take a look at the aspect of the petroleum subsidy and unpackaged it. Recently, I heard that the Central Bank of Nigeria (CBN) was actually mentioning that the subsidy was going up and then the World Bank report actually shows that Nigeria spent about N864 billion on petroleum subsidy in the first nine months of 2021. And then, recently the Nigeria National Petroleum Company (NNPC) Limited mentioned N3 trillion.
If you look at it properly, you will see discrepancies in what we call even the subsidies itself. So where is the truth in the whole of that? Why are there discrepancies? If you calculate properly with the exchange rate, maybe the CBN subsidy figure may come closer to that of the World Bank.
I want to question right from the beginning the aspect of subsidy. Why is there no harmonised figure for the subsidy that we have been talking about? If the FG is actually to remove subsidy, at what point can the government say that the subsidy has actually been liquidated? Has the government ever mentioned that this is the final figure that we reached in removing petroleum subsidy? We have not reached that, which means that there is still a question mark about this issue of subsidy itself. Of course, no matter what the situation is, If you look at the parameters in the country as of now, apart from the subsidy which will generate inflation if removed, increase cost of living for the people which is already going up, cost of living for Nigerians are up, Nigerians are actually going through hard times, actually paying more for the prices of food item. Prices of consumers’ goods are rising. The issue I want to say is that looking at even the banditry that is going on, the Boko Haram issue, the fact that farmers cannot go to the farm again and when you collect all the variables, and the issue of the removal of petroleum subsidy, of course, Nigerians should prepare for hard times.
During campaign period, of course, resources would have to be released into the system, you might argue that these are private funds coming into the system. But private companies, individuals do not exist in isolation of government patronage. Whatever the private sector will bring on board for politics will also be coming from the government in a different dimension. The tendency is that things may be rough, we should be ready to face the hard times and I believe that individuals should prepare for that too.
Why the disparities, the FG says the economy will grow by 4.2 per cent, the IMF/World Bank said growth for 2022 would be 2.7 per cent while the CBN projects Nigeria’s GDP to grow by 2.8 per cent.
That’s what I raised in the issue of subsidy. From the subsidy, there are a lot disparities there. Then there is the issue of disparity in the postulations by international organisations. If you know the psychology of the government, there is no government that would want to degrade itself. The tendency is that some of the figures that are coming from the government would be for political reasons. You can also have what we call political figures. The CBN projection is closer to that of the international organisations. So we can now say where does professionalism come in the approach. But from the other aspect, you can see it is tinged with political colouration. It is now left for you the analyst to decipher how to put this together because the disparities are just too much.
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