Last Monday, September 19, 2022, His Excellency, Dr. Peter Obi, the presidential candidate of the Labour Party, LP, was a guest of the Lagos Chamber of Commerce and Industry, LCCI.
Vanguard News reports that Dr. Obi was there to present his economic blueprint.
Obi regaled his audience with figures and examples from other climes to pooh-pooh the present construct of Nigeria’s economic management.
Peter Obi speaks on Crude theft, subsidy, exchange rate, waivers and debt
Under my watch, there’s no way we will allow crude theft. We are the only country in the world that is not meeting our OPEC production, except Venezuela, because of sanctions. In July, our production was 1,083,000, which means in July, we had 717,000 barrels shortage. Just multiply that by 31days, that gives 22,227,000 barrels on the average pricing of $110 per barrel, so, we lost $2,445,000,000 (two billion, four hundred and forty five million dollars) in one month. Even at the officialN410 to $1, (meanwhile, the real rate is N690). Let’s use a N550 to $1 average, and you multiply $2,445,000,000 by N550, you’ll have N1, 344,750,000,000, and we are owing ASUU, N1.1trillion. That’s just one month’s crude theft. In the month of August, it became worse.
In August, our supply went down to 975,000 barrels, so in August we were losing 825,000 in a day. Multiply by 31days of August, it will give you 25,652,500 barrels and throughout the month of August, it sold for $100 per barrel. So, we lost another $2.5billion. Multiply again by N550, it is about N1.4trillion.
That is official stealing and we will deal with it decisively. We are borrowing money and some people are there carting away money.
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During our time, all duty waivers must be designed to and we’ll ensure that it will have a direct positive impact on the people and not for anybody’s benefit. You must pay the duty and if you’re not going to pay it, it must be as a result of you bringing something for the benefit of the people, say health equipment, not in the presidential clinic but the general clinic.
The problem of exchange rate today in our system is that of fiscal recklessness and we can deal with it. If you stop printing money for subsidies and stop borrowing for consumption, you’ll stabilise the rate. How can Nigeria with 923,000 sq km of land, 200million people, total export last year is $47b, it is not acceptable? Vietnam, has 331,000 sq km, 100m people, and their export is nearly $400b.
They exported manufactured goods, so what are we doing here? Malaysia, living on 329,000sq km of land, 30m people, total export is $290b and we are doing $47b. Israel, 22,000 sq km, nine million people, their export $69.8b. Deal with issues of fiscal recklessness, your exchange rate will stabilise.
The subsidy is organised crime. Fifty per cent of the subsidy is corruption and we will deal with that decisively. Then, aggressively, we’ll start immediately, local refining through all forms available and they’ll be private sector delivered. We are an oil-producing country. Supply the refineries with crude in naira and we have to stop the dollarisation of our economy. Once you remove subsidies, inflation will be dealt with and deficit spending will be reduced. If you deal with insecurity today and your farmers go back to the farms, and food prices come down, you remove subsidies and deal with corruption, your inflation will come down.
Every country borrows. We cite America, Britain as borrowing and they owe more than 80percent of their GDP. China owes over 50percent of GDP. Singapore, Norway are also owing. If you borrow for consumption, you’ll have a problem. If you borrow for production, your economy will grow. Ours is for consumption and that’s why we even have problems servicing the debt.