Petrol subsidy is gone, means petrol subsidy is gone. Anything short of saying so on day one, would have amounted to kicking the can down the road, again. And that, we have seen, has been the graveyard of speeches in the last several decades full of economic philosophy and poetry but meaning nothing. Enough. President […]
Petrol subsidy is gone, means petrol subsidy is gone. Anything short of saying so on day one, would have amounted to kicking the can down the road, again. And that, we have seen, has been the graveyard of speeches in the last several decades full of economic philosophy and poetry but meaning nothing. Enough.
Of the four preceding presidential inauguration speeches since 1999 from Olusegun Obasanjo to Buhari, none that I reviewed was nearly as audacious and as provokingly clear as Tinubu’s position was on perhaps the most crucial economic decisions as he took office. Tinubu’s dilemma reminds me of the story of a number of leaders confronted with extremely difficult choices before they had time to settle in office. The first of them is the Israeli Prime Minister, Benjamin Netanyahu, who told his story eloquently in his autobiography,Israel might have had some important military successes before, but at the time Netanyahu became prime minister in 1996, the country was an economic basket case and inflation was in double digits.
It was the sort of executive indulgence that President Obasanjo also saw in Nigeria when he assumed office in 1999 and his response then, like Netanyahu’s on that day, was to scrap the nonsense immediately. By 2004, in spite of dire warnings of the disastrous consequences of his actions, Netanyahu had removed all foreign exchange restrictions. He transformed Israel’s economy from third to first world by following a simple rule: “Whenever possible, remove barriers to trade. Money, trade and investments generally flow to the freer economies away from the more controlled ones.”
From Netanyahu to Modi, the lesson is clear: A leader who inherits a broken country and an underperforming economy must take tough decisions or risk failure. Of course, tough decisions do not necessarily guarantee success. But shying away from them guarantees failure. President Goodluck Jonathan came very close to scrapping subsidy in 2012. He was snagged, not by his good intention, but by the discovery that $6.8 billion collected to mitigate the impact of subsidy removal between 2009 and 2011 after petrol prices were raised from N65 to N120, had been cornered and stolen by his own government officials.
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