Mr Bayo Onanuga, Special Adviser to President Bola Tinubu on Information and Strategy has said the removal of fuel subsidy and the move to merge foreign exchange rates caused problems in the country.
Mr Onanuga stressed the removal of fuel subsidy and the move to merge foreign exchange rates caused problems such as high fuel prices and the depreciation of the Naira.
Onanuga further stressed the resultant high fuel prices and the depreciation of the Naira combined to cause a general spike in the costs of services and goods.
The presidential aide, however, noted that his principal was already taking measures to address the challenges brought about by the “bold reforms” introduced by the administration in all sectors of the economy.
Onanuga disclosed this in a statement on Saturday in Abuja, adding that more of such measures would be taken in 2024.
He said President Bola Tinubu had never shied away from acknowledging the temporary pains triggered by the reforms, stressing that proactive measures would continue to be taken.
“Many of these measures are already being taken and, in the New Year, we expect the silver linings, that are at present understated, to blossom into rays of sunshine to be experienced by all Nigerians.
“The removal of fuel subsidy and the move to merge foreign exchange rates, two headline reforms introduced by the Tinubu administration since late May, caused problems such as high fuel prices and the depreciation of the Naira, two monstrosities which combined to cause a general spike in costs of services and goods,” Onanuga stated.
He said that the latest NBS report put Nigeria’s inflation at 26.7 per cent in September, which rose to 28.2 per cent in November from 27.33 per cent in October, adding that food inflation remained untamed.
He noted, however, that the new policies alone were not solely responsible for the economic problems Nigera is facing today.
“We were destined for the tough and rough patch, where we are today, because of the prevailing conditions before Tinubu took over on May 29.
“As at June 2023, budget deficit was N10.8 trillion. Actual debt service was 98.95 per cent of revenue, far higher than the projected 59.37 per cent. Inflow into the country’s foreign reserve came in trickles.
“And so bad was the state of affairs that Nigeria could not remit about $800 million fund of foreign airlines. JP Morgan exposed our near insolvency by claiming in a report that our net foreign reserve was just about $3.7 billion, not the $33 billion plus flaunted by Emefiele’s CBN.
“President Tinubu, who promised during the campaign to take hard and difficult decisions, moved to tackle the economic problems from Day One, by first dispensing with the wasteful fuel subsidy that was billed to consume about N7 trillion this year, five times more than what was provisioned for capital spending.”
Onanuga said that the situation was, however, taking a positive turn with the NBS report of the third quarter of 2023, adding that the president was focussed on turning the economy round for growth, development and prosperity.
“In its third quarter report for the year, the NBS reported that GDP grew by 2.54 per cent. In a similar period in 2022, GDP recorded a growth of 2.25%.
“To demonstrate that the sun may be shining on us again, the 2.54% GDP growth recorded in Q3, was also higher than the 2.51% recorded in Q2.
“The service sector, made up of information and communication, financial and insurance, was responsible for the growth witnessed in Q3. It had a 3.99% growth, contributing 52.7% of the aggregate GDP. The agriculture sector declined from 1.34% growth in Q2 to 1.3% in Q3.
“Growth was also recorded in construction and real estate, metal ores (69.76%), coal mining (58.03%), chemical and pharmaceutical products (6.77%), cement (4.2%) and construction (3.89%).
“Oil reported a negative growth of 0.85%, a major improvement to the negative 22.67% recorded at the same period last year. It was 13.43% in Q2 of 2022.
“The improvement in the oil sector and its contribution to GDP has been attributed to the improvement in the security of oil infrastructure and operations, leading to increased production.”
He said that there was a big jump in the volume of trade from N12.16 trillion in Q2 to N18.8 trillion, adding that trade volume in the Q2 of 2022 was N12.28 trillion
“We also recorded a trade surplus of N1.89trillion in Q3, an increase from the N708.8 billion in Q2 2023. In Q3 in 2022, we recorded trade deficit of N409.39 billion.
“Value of exports in the third quarter was N10.35 trillion, far higher by 60.78 per cent than the N6.44 trillion posted in Q2 2023. Crude oil dominated the export, accounting for 82.5 per cent, a confirmation that our country is pumping out more oil for export unlike the previous years,” he stated.
