Bauchi governor counters World Bank, says Tinubu’s policies not working for Nigeria
After the World Bank warned that reversing the Nigerian government’s economic policies will spell doom for the country, the governor of Bauchi State, Bala Mohammed, counter-warned that the policies are suffocating Nigerians and may lead to anarchy.
The World Bank’s Country Director for Nigeria, Dr. Ndiame Diop, gave the warning in Abuja on Thursday during the launch of the Nigeria Development Update (NDU) report titled ‘Staying the Course: Progress amid Pressing Challenges’.
The administration of President Bola Ahmed Tinubu had initiated two key policies: the removal of petrol subsidy and the floating of the Naira.
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Both policies are believed to be responsible for the current hardship in the country.
Diop said while the reforms are causing hardship, they were necessary for Nigeria’s long-term stability.
He stated: “Reversing these reforms would be detrimental and would spell doom for Nigeria”.
He said the recent increase in the federal government’s revenue in the first half of the year was largely due to the removal of fuel and forex subsidies, hence the need to sustain the reforms.
While presenting the report, Alex Sienaert, World Bank’s Lead Economist for Nigeria, noted that the forex subsidy in 2022 was even larger than fuel subsidy which was removed in June 2023.
He said Nigeria was subsidising both petrol and forex, which in total was about N10.7 trillion and more than 5 per cent of the gross domestic product (GDP).
He said: “We are seeing a fiscal consolidation underway with the fiscal deficit shrinking from 6.2 per cent of GDP in the first half of 2023 to 4.4 per cent of the GDP in H1, 2024, and that is largely due to expenditure being roughly constant.
“So, this surge in revenue is largely due to the removal of implicit subsidy which was even larger than the PMS subsidy that we talk about. So, if you look, in 2022 the PMS subsidy was around N5 trillion but if you look at the revenues the federal government should have been getting from anything dollar-related; be it oil revenues and taxes, Customs, etc, that hit N6 trillion in 2022. So, the combined cost was N10.7 trillion or 5% of GDP and that was what was driving the accumulation of Ways and Means”, he said.
He said the official exchange rate in 2022 being around N460 and the parallel being around N700, the federal government was losing around N250 for every dollar denominated revenue.
Also speaking, the Lead Economist of the World Bank for Poverty and Equity in Nigeria, Utz Pape, said governments, both at national and subnational levels, must make adequate plans to tackle Nigeria’s unemployment rate as the World Bank has estimated about 12 million of the country’s population will be in the labour market seeking jobs.
We could be at lynched due to FG’s policies – Bauchi gov
The governor of Bauchi State and Chairman of the Peoples Democratic Party’s (PDP) Governors’ Forum, Bala Mohammed, urged the federal government to review its fiscal and monetary policies as they are not yielding results in the areas of poverty alleviation and unemployment.
Mohammed stated that the Tinubu administration has put the political class at the risk of being lynched.
“With all humility, please review your policies; they’re not working. Even the growing (Federation Account Allocation Committee) FAAC allocation is not enough because inflation is eating it up and the purchasing power of the people is dwindling. We are all living with these people, and I can tell you we are at risk of being lynched because of your policies.
“We should go back to the basics. Nigerians are not enjoying the regime across board, not only the federal government, including the states and local governments. Therefore, the onus rests on you, the finance minister and the managers of the economy,” he said.
