that there would no longer be a petroleum subsidy regime as the current 2023 budget he glimpsed does not contain it.
In his inaugural address after taking the oaths of office and allegiance administered by the Chief Justice of Nigeria Justice Kayode Ariwoola, at the Eagles Square, Abuja,
The current 2023 budget has provision for the fuel subsidy till June.
Mr Tinubu stated that funds for subsidies will be diverted to other things like public infrastructure, education, health care and jobs.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.
“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,” he said.
The Nigerian government has, for decades, subsidised fuel and fixed retail prices of petroleum products. The payment has, however, threatened the nation’s fiscal position and impacted the government’s ability to fund developmental projects across the nation.
In November 2021, the federal government announced its plan to remove the fuel subsidy and replace it with a monthly N5,000 transport grant for poor Nigerians.
He also appealed to Nigerians to bury political differences and join him in a new journey of healing, nation-building and economic prosperity.
Tinubu pledged to be a president for all, irrespective of the circumstances of history and political differences.
As he took the oath and signed the dotted lines, a gracious former president Muhammadu Buhari and his wife Aisha as well Senator Oluremi Tinubu, the wife of the new president, and other family members stood by, watching with admiration.
Before Tinubu took the stage for the oath of office, the CJN had administered similar oaths on Vice President Kashim Shettima.
President Tinubu who was symbolically dressed in the national colours of green and white, charged Nigerians to not allow the opportunity for a greater development of the country to slip away.
“Our constitution and laws give us a nation on paper. We must work harder at bringing these noble documents to life by strengthening the bonds of economic collaboration, social cohesion, and cultural understanding. Let us develop a shared sense of fairness and equity.
“The South must not only seek good for itself but must understand that its interests are served when good comes to the North. The North must see the South likewise.
“Whether from the winding creeks of the Niger Delta, the vastness of the northern savannah, the boardrooms of Lagos, the bustling capital of Abuja, or the busy markets of Onitsha, you are all my people. As your president, I shall serve with prejudice toward none but compassion and amity towards all,” President Tinubu said.
He said in its over 60 years history Nigeria has endured hardships that would have made other societies crumble, but for it’s resilience and strength of its diversity the country has remained intact.
“To the surprise of many but not to ourselves, we have more firmly established this land as a democracy in both word and deed,” he said.
The president stated that, “This handover symbolizes our trust in God, our enduring faith in representative governance and our belief in our ability to reshape this nation into the society it was always meant to be.”
To advance the common vision of a better Nigeria, the president solicited the support of all Nigerians “to join me in making Nigeria a more perfect nation and democracy such that the Nigerian ideal becomes and forever remains the Nigerian reality”.
President Tinubu explained that though he fought hard to win the February 2023 election, the win does not make him any more Nigerian than his opponents, who he pledged to relate to as compatriots.
“The outcome reflected the will of the people. However, my victory does not render me any more Nigerian than my opponents. Nor does it render them any less patriotic.
“They shall forever be my fellow compatriots. And I will treat them as such. They represent important constituencies and concerns that wisdom dare not ignore,” he said.
He described the election that brought him to power as tough but fairly won, and dedicated his victory to the country with a promise to do his all to advance its progress.
“This is the proudest day of my life. But this day does not belong to me. It belongs to you, the people of Nigeria,” he said.
On the economy, President Tinubu said his administration would target a higher GDP growth and significantly reduce unemployment.
He promised to offer budgetary reform that would stimulate the economy without engendering inflation.
“Second, industrial policy will utilize the full range of fiscal measures to promote domestic manufacturing and lessen import dependency.
“Third, electricity will become more accessible and affordable to businesses and homes alike. Power generation should nearly double and transmission and distribution networks improved. We will encourage states to develop local sources as well.”
He said his administration would review all complaints by investors about multiple taxation and “various anti-investment inhibitions.
“We shall ensure that investors and foreign businesses repatriate their hard earned dividends and profits home.”
President Tinubu said “security shall be the top priority of our administration because neither prosperity nor justice can prevail amidst insecurity and violence”
To tackle unemployment, Tinubu reiterated the salience of creating “meaningful opportunities for our youth”, as he pledged to honour his campaign commitment of one million new jobs in the digital economy.
“Our government also shall work with the National Assembly to fashion an omnibus Jobs and Prosperity bill. This bill will give our administration the policy space to embark on labour-intensive infrastructural improvements, encourage light industry and provide improved social services for the poor, elderly and vulnerable.”
The President commended the action of the Buhari administration to phase out fuel subsidy which he said would save the country at a time of drying resources.
“We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”
President Tinubu said Nigeria’s monetary policy needs thorough housecleaning as he charged the Central Bank of Nigeria to work towards a unified exchange rate.
“This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.”
President Tinubu said his administration would treat both new and old naira notes as legal tender, saying despite it’s intended merits, the controversial currency swap policy of the CBN “was too harshly applied” given the number of unbanked Nigerians”.
The President said his “primary foreign policy objective must be the peace and stability of the West African subregion and the African continent,” promising to work with ECOWAS, the AU and willing partners in the international community to end extant conflicts and to resolve new ones.
The swearing-in ceremony was attended by many presidents, prime ministers and other world leaders and diplomats.
Also in attendance were former Head of State General Yakubu Gowon, former President Goodluck Jonathan, Senate President Ahmad Lawan, Speaker of the House of Representatives, Femi Gbajabiamila, serving and former governors, traditional and religious leaders, captains of industry and members of the diplomatic corps among others.
However, Centre for the Promotion of Private Enterprises (CPPE) has welcomed the position of President Bola Tinubu on fuel subsidy removal, saying the removal would unlock about N7 trillion into the federation account.
CPPE also said that the development would reduce fiscal deficit, and ultimately ease the burden of mounting debt. It also welcomes Tinubu’s decision to put in place a unified exchange rate regime.
Director/Chief Executive Officer of CPPE, Dr. Muda Yusuf in a statement said fuel subsidy removal has enormous potential benefits, adding that there is the revenue effect.
According to him, the subsidy removal will eliminate the distortions and stimulate investment, adding that smuggling of petroleum products across the borders will come to an end with a market pricing of refined products.
He said: “We would see more private investments in petroleum refineries, petrochemicals and fertiliser plants. Post subsidy regime would also unlock investments in pipelines, storage facilities, transportation and retail outlets. We would see the export of refined petroleum products petrochemicals and fertiliser as private capital comes into the space. Quality jobs will be created.
“There is a foreign exchange effect. This would result from the import substitution as petroleum products importation progressively decline. This would conserve foreign exchange and boost our external reserves. Increase in investment would translate into more jobs in the petroleum downstream sector.
“Meanwhile, we need to put an end tothe Nigerian National Petroleum Corporation (NNPC) monopoly in the supply of petroleum products. Competition is imperative for subsidy removal to be sustainable. Private sector players must have access to foreign exchange to import, pending the commencement of domestic refining operations,” he said.
Speaking further, Dr. Yusuf maintained that there must be palliatives which should be segmented into immediate, short term and medium term deliverables.
“Immediate and short-term options include wage review in public service, introduction of subsidized public transportation schemes across the country and reduction in import duties on intermediate products for food related production to moderate food inflation.
“In the medium to long-term, there should be accelerated efforts to upscale domestic refining capacity, driven by private investments; accelerated investments in rail transportation by government to ease logistics of fuel distribution across the country as well as domestic freight costs,” he stated.
Dr. Muda Yusuf however, noted that there is the need to clarify the decision of President Tinubu to put in place a unified exchange rate that this is not a devaluation proposition. Rather it is a pricing mechanism that reflects the demand and supply fundamentals in the foreign exchange market which allows for rate adjustments as and when necessary.
He said stated that it is a model that is predictable, transparent and sustainable.
“It is a policy regime that would reduce uncertainty and inspire the confidence of investors. It is a policy framework that would minimize discretion and arbitrage in the foreign exchange allocation mechanism.
“A unified exchange rate regime offers the following benefits for the economy: It enhances liquidity in the foreign exchange market. It reduces uncertainty in the foreign exchange market and therefore enhances the confidence of investors. It is more transparent as mechanism for forex allocation.
“It minimizes discretion in the allocation of forex and reduces corruption vulnerabilities. It reduces opportunities for round tripping and other sharp practices. The current foreign exchange policy regime on the other hand creates multiple exchange rates and results in the following distortions and negative outcomes: Widening gap between the official and parallel market exchange rates which allows forex round tripping to flourish.
“Collapse of liquidity in the foreign exchange market resulting in acute forex scarcity. It fuels demand for forex because of the incredible rent opportunities created by the huge parallel market premium. Creates a major disincentive for forex inflows into the economy, thus suppressing forex supply,” Yusuf said.
There is need for stakeholders’ engagement say labour leaders
Some labour leaders say there is a need for all stakeholders in the sector, including government, to analyse the issue of fuel subsidy removal mentioned by the new President, Mr. Bola Tinubu, in his inaugural speech.
Tinubu, on taking office on Monday, said that the budget in place before his coming on board made no provision for fuel subsidy, and so it was gone. The President commended the decision of the Buhari administration in phasing out the petrol subsidy regime, saying it had increasingly favoured the rich more than the poor.
“Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,” he said.
Labour leaders told the News Agency of Nigeria (NAN) on Monday in Lagos that the issue needed a holistic approach. The National Deputy President, Trade Union Congress of Nigeria (TUC), Mr Tommy Okon, said that there had to be stakeholders engagement in which organised labour was one.
“So, we cannot just comment on it until we are engaged, but we have made our position known in our charter of demand to remove fuel subsidies.
“So, it will not be a one-off respone because organised labour are partners in progress; they need to sit down and discuss and agree before that is done to avoid industrial unrest, “ Okon said.
Also, Mr. Lumumba Okugbawa, the Secretary-General, Petroleum and Natural Gas Senior Staff Association of Nigeria, said stakeholders would sit to analyse the situation and proffer the way forward for the betterment of the country.
“We need to analyse the situation, sit with stakeholders including government, and see the way forward. This is pending when our local refineries, which has been our major point, that once we produce locally, all these issues about subsidy removal will not be there. Once we produce locally, not that the price will not be there, but at least, it will be reduced,” Okugbawa said.
On his part, the Secretary General, TUC, Mr Nuhu Toho, said the union would issue a statement in reaction to some of the issues raised in the president’s inaugural speech.
.Oil, gas stakeholders commend Tinubu
Some stakeholders in the oil and gas industry have commended President Bola Tinubu’s pronouncement on removal of fuel subsidy.
They made the commendations in seperate interviews with the News Agency of Nigeria (NAN), in Lagos on Monday after Tinubu’s inaugural speech as Nigeria’s President.
Mr. Mike Osatuyi, the National Operations Controller, lndependent Petroleum Marketers Association of Nigeria (IPMAN), said that the removal was a welcome development geared toward revamping the downstream sector of oil and gas industry.
Osatuyi said that Tinubu had promised to remove fuel subsidy right from the first day of his campaigning.
NAN reports that President Bola Tinubu, during his inaugural address, promised to end fuel subsidy, insisting that no budgetary allocation was made in the 2023 budget.
Tinubu promised to focus subsidy funds on infrastructural projects, education and healthcare.
According to Osatuyi, the pronouncement is part of his campaign promises.
He said that Tinubu during his campaign had said that from day one of his administration that he would remove fuel subsidy.
“The money used on subsidy will be diverted to develop other sectors. That means Tinubu has begun to fulfill his campaign promises,” he said.
The IPMAN boss said that the removal would bring about competition among players and also address the issue of monopoly.
Osatuyi said that the subsidy removal would lead to market liberalisation, availability of product and check excesses of middlemen.
He, however, said that there would be increase in price of petroleum but added that there would be competition.
Osatuyi noted that the money saved from subsidy removal would be used to boost the economy and the well-being of Nigerians.
“I commend his effort and lauded the courage for taking the bull by the horn.
Also, Mr Tunji Oyebanji, Managing Director, 11 Plc, said that the pronouncement was a timely decision for the country.
Oyebanji, however, said it was not clear if the removal of fuel subsidy was with immediate effect.
“Scarce resources will be channelled to productive sectors of the economy.
“Borrowing levels will reduce significantly. It may possibly lead to the strengthening of the Naira,” he said.
Mr Obafemi Olawore, former Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), who supported the subsidy removal, said there was need for the nation to move toward full deregulation.
“However, as a new administration, it must be done in phases; over six to 12 months to give room for consultation and engagement so as to make it bearable and less painful.
Mr Joe Nwakwue, an oil and gas consultant and a former Chairman, SPE Nigerian Council, said that President Tinubu was right when he said that petroleum subsidies are no longer sustainable.
Nwakwue said that considering the pain and social implications of removal, it would be irresponsible for any government to just yank it off without a plan.
“A multi-month plan that addresses key fuel market issues/challenges and measures to alleviate the pain needs to be crafted, adopted and rolled out.
“A knee jerk removal would be painful to the consuming public and potentially catastrophic to the economy,” he said.
Meanwhile ,as reactions continue to trail President Ahmed Bola Tinubu’s inaugural speech in Abuja, the Trade Union Congress (TUC) has said that the president contradicted himself over the issue of subsidy removal and decision taking in his administration.
This is as the Nigeria Labour Congress ,(NLC,) said the removal of subsidy as announced by the president was a mere pronouncement until it translates to figures
The congress said the same president that said he will not take decision without consulting Nigerians can not turn around to announce immediate removal of subsidy.
The General Secretary of the TUC, Nuhu Toro, who spoke to Daily Champion on telephone, said the congress will not take the president by his words on subsidy, maintaining that he was contradictory in his speech.
According to him, “the president told Nigeria in his speech that he will not take decision without wide consultation, and will not be a dictator. President Tinubu seems to be speaking from both sides of his mouth, which seems contradictory in our view. Congress will issue a statement in response soon .
“On one hand he is saying subsidy is gone, while on the other hand he is saying he will not be a dictator”, .
President Bola Ahmed Tinubu had said in his inaugural speech that subsidy is gone, adding that it will be reset to meet the demands of the people.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor.
“Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions”, the president said..
Meanwhile, the Nigeria Labour Congress NLC said the immediate past government had played politics with subsidy, noting that several pronouncements were made about fuel subsidy removal without being translated to figures.
The General Secretary of the congress, Benson Upah, who spoke to Daily Champion on telephone, said the concern of the congress is about the translation of the subsidy removal to figures for Nigerians to see and benefit from.
On the claim by the president that the election that brought him to power reflected the will of the people, the congress secretary said the congress had earlier stated its stand that the election was marred with malpractices, irregularities and killings.
