NECA: It is Best to Remove Petrol Subsidy Completely

The President of Nigeria Employers Consultative Association (NECA), Dr. Ifeanyi Okoye, in an interview with select journalists spoke on the country’s current business environment and the need to achieve complete removal of petrol subsidy. Dike Onwuamaeze brings the excerpts:  

Sir as the president of NECA what is your overview of the Nigerian economy?

It is really unfortunate, I mean, nobody expected the wage and fuel price increases. We expected that with the new salary presented to the labour that things will start getting better and better. But unfortunately this (increase in petrol price) has come up. And I do not think that it is good for the Nigerian workers, including the employers.  The government has been tricking us into believing that the Port Harcourt refinery will soon start working, and we have all taken that as already done. But until now we have not seen the Port Harcourt refinery doing anything. And our only hope, which is the Dangote Refinery, is dancing front and back with the government, which is also a problem. So I think for Nigerian employers, and of course the labor themselves, it is not something palatable.  But we hope that something will be done by government about it. We are looking forward to something to happen.

President, as a follow-up, initially the government said that subsidy is gone. But recently we are hearing that government has gone back to paying subsidy and we do not know what is going on. Aliko Dangote has said that the government would fix the price of its petrol products. What is your take on these?

I do not think that the government has made it clear that it will be dictating the price because we know that it has deregularised the price of fuel. So it does not have the right again to say that it will be dictating the pump price of petrol to Nigerians. If there is any reason for it to start interfering again on the price of fuel that means that the downstream market of the oil and gas sector has not been deregulated. But we believe that there are steps to get this fuel price stabilised to ensure that they do not rip off Nigerians. I would want to believe that that is what the government is looking at. But for government to say that it has not deregulated, I don’t think it is acceptable, because it has been announced openly to the people, and the people have accepted it, but the way things are going, it looks a joke.

Mr. President, Sir, you know that President Bola Tinubu announced that subsidy is gone since May 29, 2023. But from what that has happened so far it is like it has not fully gone. Will you recommend that subsidy should be fully removed? 

You know as well as I do that this issue of subsidy has been creating a lot of corruption in the petroleum business in Nigeria, and the best I would advise, or I think is acceptable, should be total removal of subsidy, complete removal, and allow individuals to come and play in the field, just the way Dangote has done. The government has a lot of other areas it need to subsidise. I mean, I was very excited when I got the information about government subsidising electricity in government hospitals and schools. But the issue of subsidising fuel has been creating a lot of corruption, which we all know. So the best thing would be to remove subsidy completely from fuel, and possibly subsidise other aspects of the economy, so that the subsidy would be very clear, and of course acceptable to the people.

I want to know from you as the president of NECA what employers should expect from your tenure?

You know what NECA is all about. The NECA is the voice of employers in Nigeria. And what I am expected to do is to move what NECA is known for forward to make it better for Nigerian employers.So that is exactly why I am here, and I need to do that. And that’s what I’m here to do.

In the space of four years, many companies, like 15 of them, giant companies have left Nigeria. What is your view on how this could be tackled?  

I think these are some of the points that the government needs to look into. There are a lot of issues that are bothering manufacturers in this country. One of the major aspects of the economic problems that most manufacturers have is infrastructure. When you are a manufacturing in Nigeria, you are paying a lot providing your own infrastructure. You buy your generator, you provide security for your organisation and yourself who owns the company. You have battle with the issue of forex going up and down, instability of policies from government. I mean that even the roads are not there to evacuate the products on has manufactured. I mean, these things are major reasons why most of these companies are leaving. And of course, to get them back and encourage them to stay the government needs to seriously sort out these issues one by one. I mean, nobody wants to stay where he will be losing. No investor goes where he would not make his money back. So the only thing is for government to look into the essential infrastructures provided within the country and make them acceptable for any business to operate.

Despite all the efforts of the government to there are still policies stifling and suffocating business and pushing more out of the country, especially the SMEs. Is the federal government’s ongoing reform on the right directions and creating positive impacts for the private sector?

I do not think that the federal government is doing enough. It is doing some things but what it had been doing is not the best form. It has not actually risen to the occasion. Wale Edun would come and tell you that they have done this and that they have done that. I mean, he is doing his job. And in spite of what he is telling us, what we will accept is the way the changes he is talking about are affecting us as employers and manufacturers. When you are making changes and the people you claim you are making the changes for are not having a feel of the changes, of course, nothing is happening. So I want to believe that the people receiving the changes from the government are not yet comfortable.

Recently, the minister of Finance said that President Tinubu did not promise Nigerians the silver bullet, which is figuratively saying that the President didn’t promise to give Nigeria a solution. What is your reaction on this comment?

I do not want to agree with you that President Tinubu did not promise Nigerians solutions.

President, what he’s trying to point out, there is a proposed stabilisation fund for the manufacturing industry worth N650 billion.  What is your view on this?

In fact some manufacturers were having meeting reently during their AGM and it was mentioned that no key manufacturer has benefited from that money. And I agree with them. I mean, we are still hoping that something will be done. And it was also recommended that the people to benefit must be the people that are recognised manufacturers, possibly members of the Manufacturers Association of Nigeria, or at least through NECA, because most of the members of the Manufacturers Association of Nigeria (MAN) are also members of the Nigeria Empire’s Consultative Association (NECA). And not tomorrow you bring out names and say these are beneficiaries of this fund when it is clear that no manufacturer has benefited from it.

What will you recommend as the best approach for the government to address the forex crisis, which is key to planning your business and doing government’s projects?

You see we have thought that the government has taken a very bold step when it stopped the operation of different levels of exchange rates for different people. If that is well managed, it would have been the best so that the Naira will take its rightful position. Forcing Naira to occupy a wrong position can never last. And the best way to do it, I believe, is the way the President had started it. Allow Naira to take its position. Do not give out different exchange rates so that whoever is coming in comes in at the same rate and suffers the same thing. If that is kept religiously, I believe Naira will take its rightful position and stabilise. And then whoever is going for any business will know what he is going for. And not that you buy a dollar at N1,600, someone else gets a dollar at N1,200. I mean, that does not make for stability.

So what would you consider the fair value of the Naira to the dollar?

I cannot give that right now until the Naira is allowed to take its rightful position. I cannot sit here and tell you that Naira is properly valued. If Naira is allowed to create its own value we will all see it stabilise.