Economic Reforms: The Worst Is Over, Says Oyodele

Oyodele shares an optimistic outlook on Nigeria’s economic reforms, assuring citizens that the most challenging times are now behind us.

Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has assured Nigerians that the economic reforms being implemented by President Bola Ahmed’s administration are starting to produce positive outcomes.

During his speech at The Platform, organized by the Covenant Nation on Saturday, Oyedele assured the audience about the benefits of the ongoing reforms.

He stressed that eliminating petrol subsidies is the most beneficial decision Nigeria could make.

Eliminating subsidies is the best decision we’ve made as a country. Now, we can finally say that subsidies are a thing of the past.

We were dwelling in superficially improved realities. Reflecting on approximately two years ago, the naira exchange rate was quoted at N450 depending on your source. But was that truly our exchange rate? Petrol prices appeared to be below N200 per litre, yet was this genuinely accurate? There wasn’t a band A then; what about electricity costs at that time—were they actually reflective of true pricing? A nation can set petrol prices at N200 per litre if it is financially feasible for them. However, it’s problematic if such expenses are unsustainable.

As a parent, I want to send my kids to school. If I can afford a school that costs N200 million per term, that’s fine. However, if I can’t manage that expense, they might only attend for the first term and wouldn’t be able to continue their education there. Perhaps it would be better for them to go to a school charging N200,000 per term instead.

Nigeria was underperforming, leading to a widespread feeling that the economy wasn’t thriving as it should. Despite this perception, we considered our economy to be the largest in Africa.

Our GDP was approximately 450 million dollars. We estimated our per capita income to be around $2,000 per person, but it turned out to be lower than that.

Nigeria utilized all its revenue solely for debt servicing, without actually repaying the debts. Essentially, everything else we did—whether it was paying salaries or combating Boko Haram—was financed through borrowing.

“When Nigeria took on loans, we borrowed substantial amounts of money, which were then used to sustain the economy and manage debt obligations.”

If anyone wasn’t losing sleep over this, they must be from another planet. The outcome was predictable; it felt like a Sri Lanka or Venezuela situation happening to us.

In their countries, even if you had money, you couldn’t purchase fuel. In Sri Lanka, there was a time when people weren’t able to drive their cars every day because no fuel was available.

“Our GDP growth rate has been quite low, staying below 10 percent over the past decade. In real terms, it’s actually negative.”

He stated that the Nigerian government had resorted to printing money for spending, which he considered the worst possible action a country could take.

The Ways and Means balance was elevated. We were resorting to printing money for expenses, as borrowing from abroad wasn’t an option due to the perceived risk involved in lending to us. Our cash flow was insufficient, and our ability to secure local loans was limited. Consequently, we relied on printing money for spending needs, which is a risky strategy.

We printed nearly N40 trillion naira, including interest, and were surprised by the resulting inflation. Many Nigerians don’t understand that invisible factors often influence visible outcomes. The impact of subsidy removal is not immediately tangible or something you can physically perceive.

Some airlines have even halted flights to Nigeria due to the accumulation of foreign exchange debt owed to international carriers.

He encouraged Nigerians to maintain an optimistic perspective about the country.

Nigeria itself is not the issue; perhaps the problem lies with those who are leading it.

In America, gun-related violence is a daily occurrence. Yet, you’ll rarely hear Americans say “May America never happen to you.”

Let’s stop saying “May Nigeria never happen to you.” Instead, let’s start saying “May Nigeria work for me.”

“Based on the available data, I personally believe that the worst is over,” he said.

Since taking office in May 2023, President Tinubu has introduced several reforms, including the elimination of fuel subsidies and the implementation of contentious tax bills.

The elimination of fuel subsidies has subsequently led to a rise in the prices of goods and services.