It appears savings from subsidy removal are used in running Tinubu’s expensive govt- Onyekpere, rights lawyer

Lead Director of the Centre for Social Justice (CSJ), Eze Onyekpere, calls on President Bola Tinubu not to assent to the amended CBN Ways and Means bill recently passed by the National Assembly. In this interview with ANTHONY OTARU, the activist, who focuses on development law, economy, and freedom of information, among others, said assenting to the bill would be detrimental to the economy and further increase domestic borrowing to unjustified levels. He also talked about other allied matters

In a recent amendment, the National Assembly raised the CBN raised the Ways & Means Act from the current five per cent to 10%, what consequences will this have on the economy?

Recall that the Central Bank of Nigeria (CBN) Act allows for a maximum of five per cent revenue of the previous years’ Ways and Means to be loaned to the Federal Government, but I think shortly after President Bola Tinubu came on board he also asked for the amendment to raise it from five per cent. My opinion then, which is still my opinion today is that if there was so much abuse when the CBN Act was five per cent, why do you want to increase the sealing? Does it mean you want the abuse to now become official? They were complaining that N30trn was stolen, so, what will happen now is that it will become official when it is increased. At a time, we were told that the government of the day wanted to reduce its take on Ways and Means, but this has become a contradiction. If it has been passed already by the National Assembly, the President should not assent to it. But whether he assents or not will show you his belief in fiscal and monetary reforms whether he only believes in the stories he’s been told. If he assents to the bill, then it tells you he does not believe in fiscal reforms. If he does not assent to it, it means there’s a little measure of hope remaining.

A report by Afrinvest (West Africa) Limited, an investment management holding active in securities, investment banking, and trading says Nigeria’s debt stock may hit over N130trn before the end of the year. Are you worried?

Of course, there is a need for worry, but the President said in his last speech that he has reduced the debt service as a per cent of revenue from 97 per cent to 68 per cent. I think that is what he said very recently in his last broadcast to the nation, if am right. If that is true, it appears it contradicts because the debts are increasing, and if the debts are increasing, that means debt services should also be increasing. I am not surprised because if you check very well, of late, there’s hardly any day you listen to the news and you don’t read about a new borrowing either from the World Bank or from the African Development Bank or African Export-Import Bank (Afreximbank), Chinese Banks and bonds that are floated. When they float the bonds or treasury bills, they do it silently. But what I am saying is that if the debts are growing higher, I won’t be surprised because borrowings are going higher. That is not the way to go, we don’t need a bulk of this new money because they are not properly targeted to specific development areas, they are being mismanaged or abused in terms of not being used for capital expenditures. Some of them are used for profligacy- to pay salaries or to buy SUVs and all kinds of stuff, so, if we need money to run social expenses like capital expenditure, we should be able to cut back on waste in government. We should tell ourselves that we are removing fuel subsidy as a means of saving money that could be invested in education, health, agriculture, and other developmental needs. The question is, we have been on this subsidy savings for the past year, where is the money or resources that have been saved? So, if we are still borrowing more and more at a time, we should save, but it appears that whatever has been saved has also been gulped by the cost of governance. That the powers that be have diverted same to their pulse. Although we know that there is still subsidy on PMS because the landing cost is still over N1000, whereas it sold for about N700. The challenge is not about the saving they are talking about the usages. A 2022 report by the Nigeria Extractive Industries Transparency Initiative (NEITI) says we have lost about $46.2bn to oil theft in the last 12 years. If you convert that to an exchange rate of about N1600 you will be getting about N73trn which is more than double our budget. So, when you do such massive industrial stealing, why would you be complaining there’s no money when you allow it to happen, I don’t think Nigeria’s problems are so much about the resources, it’s about how we have mismanaged them, and yet we are not repentant about the mismanagement of our resources. For instance, Tinubu in his address said he has foreign investors worth over half a billion dollars, which is equivalent to $500m. He told us about his achievement in his last broadcast, but immediately after he stated this, something struck me. The same man who says investors of half a billion dollars are coming is allegedly frustrating a $20bn investment by Alhaji Aliko Dangote’s refinery, a national, you did not beg him. You travelled to go and beg for $500m but a citizen brought $20bn which means, all your efforts are zeroed in. Whatever is happening to the Dangote Refinery, Tinubu is in charge of the Ministry of Petroleum and none of his directors can say anything in contradiction to the feeling of Mr President without either being sacked or called to order. In essence, what I am saying here is that we are not yet ready. The Nigerian National Petroleum Company Limited (NNPCL) has been telling us the nation’s refineries would be ready right from Buhari’s tenure, it’s funny, and I think we are not yet ready.

So, you do not believe the subsidy on PMS has been removed?

Subsidy removal is a question of ‘what should have been done’ before or after the removal. It appears as Nigerians, we are arguing that the subsidy should go, we did not want it to go because the government is using it to fleece the people. The money they were stealing was more than what they were paying for a subsidy, all of which was hidden under the umbrella of subsidy. Every year, we were doing N5trn to N6trn subsidy payments even before the naira was further devalued. So, people were tired of that money without tangible results. But in removing subsidy or floating the naira, there are conditions- there are things you must do before the decision, and there are also subsequent conditions for taking the action to make sure it gives you the right results. The hardship ought to have been ameliorated so that people do not suffer too much. None of these steps were met, nothing was done after the removal, and this is what is giving the subsidy removal a bad name. It is like a doctor who is to do surgery, the first thing he does is to administer anesthesia, a pain reliever that reduces that part of the body and helps the patient tolerate any pains when the surgery starts. But this doctor starts the surgery before he remembers the sedatives and when the patient is complaining and wailing you now say, no, you have to be patient and say, your health will be better tomorrow. This is what we are seeing. Some of these things are what the Nigerian Labour Congress [NLC] agitated for, but people did not take it seriously, including the media. The refineries were supposed to be fixed before you removed the subsidy, even if it is a local one. That is why after the subsidy removal, everybody started suffering and asking for a policy reversal. Unfortunately, the same government has equally started to play politics with it again, you must fix the refineries, you must stop oil theft, and you must reform the NNPCL, which has become a private sector entity, but we can see that nothing has changed with its management. You must reform the NNPCL and introduce good security measures across the country so that farmers can go back to their farms and even our young men who have no jobs can embrace farming. Today, the National Bureau of Statistics says we have over 40 million acres of land across the country that is uncultivated, so, what is stopping us from having people going back to farms? Presently, there is insecurity and banditry and we have a National Security Adviser in the person of Malam Nuhu Ribadu- what is he advising? We also have the Chief of Army, Chief of the Navy Staff, and Chief of Air Staff, none of them are doing what they are supposed to do. All we need is a political will to get out of the mess.

It appears the majority of Nigerians, especially the ‘#EndBadGovernance protesters’ are not interested in the Federal Government’s palliatives, what do you think is their major grouse with this administration?

An average person’s right to food is about the right to feed oneself. The right to food is not for anyone to come and feed you, the government should just go ahead to create a conducive environment so that anybody who chooses to go to the farm can easily fend for him/herself at will without challenges. If am not a farmer, I still need enabling environment to go and do my legitimate work to feed myself. It is not a right to sit down and somebody will be feeding you. A palliative according to the dictionary is not a cure, it is like a doctor has finished looking at a patient and saying you have a particular ailment, the doctor gives you a pain reliever to seduce the pain before a surgery is carried- out when the need arises. So, what Nigerians need is not palliatives, but a cure, to give everyone a conducive environment to live, work, and fend for themselves.

Nigeria’s debt to GDP revenues are on the high side. What are the implications?

The implication is that the economy is malfunctioning. In President Goodluck Jonathan, time our GDP was hitting almost $500bn, but today our GDP is around $300 billion, so we are not even moving forward install-mentally as it ought to be but going backward, which means, we are producing less goods and services today than we were over ten years ago. The implications are what we are seeing today—our currency is losing value, more Nigerians are unemployed, more Nigerians can’t afford basic health care and education, our factories are shutting down, our electricity reach is going down or intermittent, and just name it, the naira is around N1,600/$, ordinary bread is around N1600 up from N300-N400. During Jonathan’s days, it was officially about N120 or less than N200/$. The implication is that we’ve been robbed at gunpoint, but refuse to understand. Presently, the more you work, the less you earn because the naira has been devalued after the floating of the naira. A professor’s salary is about N400,000, which is equivalent to $250. This is the money those working in the United States earn on an hourly basis within two or three days as wages for somebody washing plates. Even the new minimum wage of N70,000 is about $46.6, which is not up to the wages that a cleaner in Europe earns for two days. This is all a joke, your money has depreciated, and the more you save, the less you have, so, we have all been robbed at gunpoint. Our currency has depreciated more than expected.

How do you marry this with the food Inflation that is hovering around 33%?

What is happening is a product of a lack of understanding of the nature of the economy. In human rights jurisprudence, we usually study that human rights are interdependent, indivisible, and inseparable. You can’t separate one human right from the other, the argument is that, do you have a right to human dignity if you can’t pay your rent, what right do you have? The economy is a complete package, whatever happens to the price of fuel touches your rent, your health, your food, and whatever happens to the value of the naira goes round. So, we are in a period of stagflation, it is taken from two words [Stagnant Economy. There is little or no economic growth going on in Nigeria today and there is high unemployment and high inflation. So ideally, in economics jurisprudence and theory, these two things should not converge at the same time because, in trying to create jobs, you may have a little inflation, in trying to reduce inflation, it can accelerate the economy and reduce unemployment. Nigeria’s problems are not about rate hikes, the decision should not be fiscal policy sit at your own and the monetary policy sit at your own. There must be a convergence policy framework of both the fiscal policy and the monetary policy. The more you hike the interest rate the means the cost of borrowing by the private sector will affect the price of production. If you take a high interest rate to produce, you may not have the guarantee that people will buy, so your cost of servicing those debts will increase. As you increase the MPR, the cost of servicing bonds and others will increase. Borrowing cost applies to both private and public sectors, so, the cost of servicing public debts will also increase. Firms that are finding it difficult to borrow at high interest rates will not expand production and services to grow their businesses as well as the economy. The government needs to rejig its economic team.

Holistically, what can be done to revamp the economy?

First, the government should play down politics, religion, and ethnicity in appointive positions. There’s a need for the government of the day to choose experts from across the divide that will drive the economy. It must get competent hands to run the Ministries, Departments, and Agencies (MDAs). Those who show good character with honesty and that they are coming to save and not make money for themselves.