Fuel Subsidy Removal: What ‘courage’ Really ‘possessed Tinubu:
For over eight years, since I started writing a weekly column in 2014, I repeatedly called for the abolition of the fuel subsidy. It distorted the economy and fed massive corruption. So, when, on his first day as president, Bola Tinubu scrapped the subsidy, I should be thrilled and excited. But far from it! Why? You might ask!

Well, as a political economist, I know the dynamics between politics, economics, and institutions. The right economic policy under the wrong political conditions or process will lack credibility and efficacy. In policy making, there’s a distinction between substance and process: substance is “what to do”, that is, the nuts and bolts of a policy; process is “how to do it”. Both must work in sync; otherwise, there’s a risk of failure.

Tinubu went to his inauguration on May 29 with no intention to scrap the fuel subsidy from DAY ONE! Rather, his prepared speech referred to “phasing out” the subsidy, in line with his manifesto, “Renewed Hope 2023”, which says on page 37: “We shall phase out the fuel subsidy.” But during his inauguration speech, Tinubu blurted out: “The fuel subsidy is gone.”

During his recent trip to France, Tinubu told the Nigerian community in Paris what transpired. He said he did not discuss the automatic removal of the fuel subsidy with his aides before the inauguration and did not include it in his speech. Then, he said: “When I got to the podium, I was possessed with courage, and I said subsidy is gone.”

Really? What kind of courage possessed Tinubu to behave like an autocrat? In a democracy, the cause cannot simply excuse the leader and justify the means. How could he suddenly be “possessed with courage” to announce a policy with far-reaching consequences for ordinary citizens without adequate consultation, preparation and remedial measures? Such capriciousness is associated with dictatorships!

Let me repeat what I have said many times in this column. Even if the Supreme Court validates Tinubu’s election, his administration is a minority government. He has the weakest mandate of any president since 1999, even ignoring the credibility deficit of that mandate. The overwhelming majority of the electorate, 63.39 per cent, did not vote for Tinubu. If he governs with arrogance, he will, sooner or later, find that mere constitutional technicalities are different from legitimacy and a strong mandate.

The mandate hypothesis says that a government has greater scope for big bang reforms if it won a strong mandate for change in an election. Surely, running a minority government with a weak mandate, Tinubu must govern with humility and build genuine consultation and national consensus around critical reforms. Ideally, he should form a broad-based national unity government. Unfortunately, he’s pursuing a Machiavellian, divide-and-rule strategy with Nyesom Wike’s fringe group, whose dubious contributions to his “victory” did not take his votes beyond the disputed 8.8 million out of 23.4 million valid votes!

But there’s another damaging political context. Recently, former President Muhammadu Buhari said he amended the Petroleum Industry Act 2021 to delay the fuel subsidy removal “to allow Tinubu to win the election”. Buhari said that if he had withdrawn the fuel subsidy, the “social consequences” would have lost Tinubu the election. “Polls after polls showed that the party would have been thrown out of office if the decision as envisaged by the new Petroleum Industry Act was made,” he said.

So, Buhari manipulated the law and policy on fuel subsidy removal to “allow Tinubu to win the election”. But once Tinubu “won”, he was “possessed with courage” and spontaneously scrapped the subsidy, ignoring the social consequences that Buhari said would have cost him victory. Essentially, if Buhari must be believed, Tinubu “won” the election on a deception. That makes the whimsical arbitrariness of his autocratic decision to remove the fuel subsidy even more politically unacceptable.

What about the crass hypocrisy? In her book Fighting Corruption Is Dangerous, Dr Ngozi Okonjo-Iweala, former Finance Minister, and current Director-General of the WTO, describes the visceral opposition to President Goodluck Jonathan’s plan to phase out the oil subsidies in 2012. The opposition was led by Tinubu’s then party, Action Congress of Nigeria, ACN. In a recent article titled “Fuel subsidy and the God of Jonathan”, Dr Reuben Abati, then President Jonathan’s spokesperson, also described the extent of the opposition, and referenced an article written by Tinubu in 2012 titled “Removal of oil subsidy: President Jonathan breaks social contract the people” (The Nation, January 11, 2012.)

Yet now that Tinubu is in power and needs money for his administration, he’s consumed by a latter-day zeal to tackle the fuel subsidy. Such dishonesty, hypocrisy and opportunism undermine the credibility of policies, even the right economic policies.

grandstar:
Unfortunately for Olu Fasan, the columnist got torn to pieces by commenters in the Vanguard newspaper.

The article made absolutely no sense and he sounded partisan and naïve.

As an economist, fully aware of what Nigeria or Nigerians are, come out to condemn the president for having the courage to discontinue petrol subsidies within a day. Had he waited, of dithered, opponents of the subsidy removal would have gathered enough strength to frustrate any removal.

His statement that he runs a minority government is also absurd. APC controls both houses and that's what matters in Nigeria and not really how many votes he won. Was it Peter Obi who had only the 25% voters threshold in 16 states, came third and would have been the weakest in both houses have the power to carry out tough reforms.

Also, what does he mean prosecute the fuel subsidy cabals? This is Nigeria. Such probes gets nowhere. What's important is that the subsidy is gone.

Kukutenla:

The commenters are Agbado bats. What he means by minority govt is in the context of the fact that overwhelming majority voted against the ruling party. That's a repudiation of the eight years APC has spent in govt.
The truth is the country is still hurting from that forgettable eight years such that even the SW wing of APC are sparing no blushes in calling the regime names. So to introduce subsidy removal in that context is not only callous but as thoughtless as Rehoboam's speech that ended the union of Israel and Judah.
That said, even the World Bank which has been the poster boy of such reforms in developing countries from the 80s has come out to criticize the policy, Let me mention the obvious cluelessness of where to go next after subsidy removal and floating(devalue in real terms) the naira. I remember an article in 2021 or thereabouts which asked what would be next when Osinbajo then VP raised the need to devalue the naira. We're at that point now. And there seem to be no idea in the room except waiting for manna from heaven in the form of FDI else, we simply die here.
I already highlighted the problem with FDI in a thread I opened, which is that unlike 1999, the rest of Africa, especially the leading lights are not in the mood to kowtow to Western imperialists in the guise of chasing FDI, judging from the last outing in France. Secondly, FDI does not necessarily mean development in real terms. 1999 again is a prime example. Economic growth, yes! As the numbers will start to look up and look good but all round development, the type we really dream of to solve our perennial problems in power, transport, trade, education, health and technological innovation may remain elusive.
So we're back at the same question asked Osinbajo then, what next?

Kukutenla:

The commenters are Agbado bats. What he means by minority govt is in the context of the fact that overwhelming majority voted against the ruling party. That's a repudiation of the eight years APC has spent in govt.
The truth is the country is still hurting from that forgettable eight years such that even the SW wing of APC are sparing no blushes in calling the regime names. So to introduce subsidy removal in that context is not only callous but as thoughtless as Rehoboam's speech that ended the union of Israel and Judah.
That said, even the World Bank which has been the poster boy of such reforms in developing countries from the 80s has come out to criticize the policy, Let me mention the obvious cluelessness of where to go next after subsidy removal and floating(devalue in real terms) the naira. I remember an article in 2021 or thereabouts which asked what would be next when Osinbajo then VP raised the need to devalue the naira. We're at that point now. And there seem to be no idea in the room except waiting for manna from heaven in the form of FDI else, we simply die here.
I already highlighted the problem with FDI in a thread I opened, which is that unlike 1999, the rest of Africa, especially the leading lights are not in the mood to kowtow to Western imperialists in the guise of chasing FDI, judging from the last outing in France. Secondly, FDI does not necessarily mean development in real terms. 1999 again is a prime example. Economic growth, yes! As the numbers will start to look up and look good but all round development, the type we really dream of to solve our perennial problems in power, transport, trade, education, health and technological innovation may remain elusive.
So we're back at the same question asked Osinbajo then, what next?

grandstar:


I don't see anything wrong with the way the subsidy was removed or the Naira floated....

grandstar:


I don't see anything wrong with the way the subsidy was removed or the Naira floated. Waiting for the "best time" or "best execution" won't get anywhere. His courageous actions have been rewarded on the stock exchange.

You're correct. The economy is in a total mess, with $12b worth of unmet dollar fx demands for instance. An economist suggested the country enter into an IMF agreement. They would provide the necessary balance of payment support. Nigeria will never go that route, which actually would actually have been less painful.

An economist here said the future would depend on 3 things:

1. Who is appointed as the CBN governor.

2. Who is appointed as finance minister.

3. How committed the present government is to a clean and transparent privatisation programme and sale or commercialization of any government parastatal.

For the first 2, I feel the government can get it right. For the 3rd, I see at best a 70% pass mark. There's bound to be some hanky-panky for bids for oil blocks for instance. I don't know why I see one or two actors in this government going home with an oil block or 2.

One policy the government must introduce is a cut in the company tax rate to 15% or less. This would not only encourage local and foreign investment, but improve compliance and raise more revenues, rather than less. Low corporate taxes were Ireland and Hong Kong's success secrets and many central European countries have gone that route and it is transforming these countries.

CodeTemplar:

One thing wrong with the naira floating is the pressure leisurely imports will put on essential imports.
Hair extention, wines, fancy gadgets importers will start competing for forex with farm and industry machinery/equipment importers. While the importers of leisurely goods have right to do so, I don't think it is wise to allow that without heavily taxing such imports to discourage end users from keeping up the demand of such GDP-shrinking imports.

CodeTemplar:

Petrol subsidy could have been better phased out by building industrial cities like Eyimba example in abia around cheap power plants whose output cannot end up in neighbouring countries by mistake or being used to watch AfricanMagic leisurely at home.

An abrupt and ill planned discontinuation of subsidy was typical of the Nigerian govt and their fire brigade approach to sensitive issues.

grandstar:
Unfortunately for Olu Fasan, the columnist got torn to pieces by commenters in the Vanguard newspaper.

The article made absolutely no sense and he sounded partisan and naïve.

As an economist, fully aware of what Nigeria or Nigerians are, come out to condemn the president for having the courage to discontinue petrol subsidies within a day. Had he waited, of dithered, opponents of the subsidy removal would have gathered enough strength to frustrate any removal.

His statement that he runs a minority government is also absurd. APC controls both houses and that's what matters in Nigeria and not really how many votes he won. Was it Peter Obi who had only the 25% voters threshold in 16 states, came third and would have been the weakest in both houses have the power to carry out tough reforms.

Also, what does he mean prosecute the fuel subsidy cabals? This is Nigeria. Such probes gets nowhere. What's important is that the subsidy is gone.

chrisxxx:
Nothing possessed Tinubu other than Obis impetus. Obi had said he would remove subsidy and his mammoth of supporters didn't query him. Tinubu capitalised in that to act. He believed if Obi says it then it is good.

hedonido:
Their response to why they opposed subsidy removal in 2012 was that they couldn't trust the "corrupt" government of Jonathan to manage the savings and implement palliative measures. Isn't this the biggest joke of the century?

Why should I trust a known kleptocrat and epitome of corrupt enrichment like Tinubu to superintend subsidy removal now? Someone who became the richest politician in Nigeria by milking dry the resources of Lagos State and using it to build his own private political dynasty?

The weak mandate thing is another matter, which would become manifest shortly, because I don't understand the stupid arrogance of this clown whose only known support block is his Yoruba people. The vast majority of voters nationwide did not vote for you and you know it, yet you're prancing about like a peacock, purporting to implement heavy handed anti-people polices. I don't blame you. I only blame the very docile masses.

wildernessVoice:
Many of us are in the school of thought that pms subsidy should be removed but not in a harsh manner as pronounced on May 29th.
We expect the removal to be in phases(gradual) until major palliatives are put in place.
If we have a working rail transport system and AGO driven Buses provided for both intercity and intracity transportation, the pains could've been minimal on the citizens.

allthingsgood:



I am from the south south. I support Tinubu 1000%. The fact that you obedients were so obsessed with bullying people with divergent views, doesn't mean we still won't vote Tinubu. I will vote for him a thousand times over Peter obi

hedonido:


You're within your right to continue fooling yourself.

Kukutenla:

You didn't answer my question about what next after subsidy removal and devaluing the naira?

Kukutenla:

I think we as a country need to chart our own course far away from western economic ideologies.

Kukutenla:

Cutting corporate tax is an elitist move which enriches the corporate giants and players with little effect on those who feel the devaluation and subsidy removal the most; the informal sector.

Kukutenla:


Such policies don't push people out of poverty or create equal distribution of wealth. What we need is to trickle down the wealth of the nation to the grassroots. The Buhari administration understood this but were largely clueless on how to go about it which is why they carried out such programs like N-power, tradermoni etc.

Kukutenla:

Same with the stock exchange. To about 80% of the populace, stock exchange is "audio money". Those who followed the hype in 2005-2008 have bitter stories to tell.

Kukutenla:

My point is, this is a well worn and beaten path for us. SAP, or OBJ's reform programs. It's a two- edged sword. While IBB's led to more economic woes, OBJ's successes couldn't be sustained by succeeding administration who didn't have the international clout and reach he had. So, this path is not new. We need to break this circus to get real development the likes which we can boast of in fifty years' time.

grandstar:


I did. I said it all depends on who the incoming cbn governor, finance minister are and how transparent the privatisation policy is.

I also included a cut in corporate taxes which you condemned,



Free market reforms are the only way forward or you want the backward interventionist policies to continue?



I totally disagree and statistics prove otherwise.

For businesses to make money, they have to invest. These investments create jobs and wealth. This does trickle down. Ireland and Hong Kong have used this to move from low income to high income in a generation.




The primary purpose of low taxes isn't to help the rich but to uplift the poor. A booming economy is a job creation monster, especially if the labor market is flexible. At a point in China's growth, the labour market became tight and wages were growing at 20% clip annually.

The best way to help the poor is through rapid economic growth. That's what China, Japan and the Asian tigers used to lift themselves out of poverty in a generation.

Other schemes to help the poor are a[i]n addition[/i] to growth generation policies. The best policies for poverty alleviation are Conditional Cash Transfers. This is the policy of giving poor families (money is usually paid out to women) monthly if they meet certain indices such as sending their wards to schools or taking vaccinations.



Foreign Portfolio Investment isn't all bad as you paint it. There's both the good and bad side of things.

Then, there was a global credit bubble but now, the developed nations are either experiencing a recession or are suffering from a downturn.

Interest rates are quite high now and not low like it was in the mid 2000s as central banks are hawkish relating inflation. This is the best time for FPI inflows since interest rates are high and now low.

Then, it was the tightening of interest rates in the US that led to massive outflow of portfolio investment.

Also, money from the stockmarket does trickle down. I am an estate agent and a lof of money being made in the stock market boom was flowing into the property market. There was a massive increase in property prices. The outflow led to a property price slump. Prices actually started going down, unknown in Nigeria's history.



There was nothing wrong in SAP. It was Babangida's insincere implementation of it.

For instance, a Structural Adjustment Programme demands low budget deficits or a balanced budget. This wasn't the case under Babangida who believed in money printing to cover massive budget deficits. This fuelled both high inflation and persistent devaluation of the Naira.

Contrast that under Abacha. Because he was fiscally prudent (though corrupt)), inflation was relatively stable. The Naira stayed at $1- N80 from 1995-1998.

OBJ's policies couldn't be continued by successive government not because of lack of foreign clout (did the IMF not plead with the Sanusi to devalue the Naira in the early 2010s. or did they not meet with Buhari to end fuel subsidies and float the Naira) but rather they lacked the 2 financial discipline of OBJ or simply followed bankrupt schemes like that under Buhari.

Cracks began to appear when Jonathan increased the minimum wage from 5,500 to 18,000. This wasn't financially prudent. This was a very expensive increase, done to win workers support for the coming elections.

Next was his inability to end the fuel subsidies. He only managed to increase the price, thereby reducing the amount of money used to provide the subsidy

If he had increased workers salaries to 12k and had removed the fuel subsidies, he would have performed much better.

Buhari was a complete disaster. Once he started fixing the exchange rate upon assumption of office in 2015, I knew the economy was finished.

Tianamen1:


I agree with most of your views. I would like your opinion on property taxes since you are in the real estate business. America has an average property tax rate of 1.1% annually. If the FG implemented such a policy, Nigeria's revenue to GDP problem will be solved. I believe Kemi Adeosun's VAIDs problem was based on property taxes.

grandstar:


Hi
Property taxes usually go to the local governments. In Nigeria, they are called tenement rates.

However, Nigerians don't like paying their taxes, and despite the fact that Lagos state has its own equivalent of property tax with very low valuations to make it affordable to pay, people are still not still paying their fair share.

Also, in Nigeria, the yield on property in rental form is quite low. It is about 4% in Lagos for instance. So, a 1.1% property tax rate would be considered too high. A 0.2% rate should be the max here.

grandstar:


I did. I said it all depends on who the incoming cbn governor, finance minister are and how transparent the privatisation policy is.

I also included a cut in corporate taxes which you condemned

Free market reforms are the only way forward or you want the backward interventionist policies to continue?

I totally disagree and statistics prove otherwise.

For businesses to make money, they have to invest. These investments create jobs and wealth. This does trickle down. Ireland and Hong Kong have used this to move from low income to high income in a generation.

The primary purpose of low taxes isn't to help the rich but to uplift the poor. A booming economy is a job creation monster, especially if the labor market is flexible. At a point in China's growth, the labour market became tight and wages were growing at 20% clip annually.

The best way to help the poor is through rapid economic growth. That's what China, Japan and the Asian tigers used to lift themselves out of poverty in a generation.

Other schemes to help the poor are a[i]n addition[/i] to growth generation policies. The best policies for poverty alleviation are Conditional Cash Transfers. This is the policy of giving poor families (money is usually paid out to women) monthly if they meet certain indices such as sending their wards to schools or taking vaccinations.



Foreign Portfolio Investment isn't all bad as you paint it. There's both the good and bad side of things.

Then, there was a global credit bubble but now, the developed nations are either experiencing a recession or are suffering from a downturn.

Interest rates are quite high now and not low like it was in the mid 2000s as central banks are hawkish relating inflation. This is the best time for FPI inflows since interest rates are high and now low.

Then, it was the tightening of interest rates in the US that led to massive outflow of portfolio investment.

Also, money from the stockmarket does trickle down. I am an estate agent and a lof of money being made in the stock market boom was flowing into the property market. There was a massive increase in property prices. The outflow led to a property price slump. Prices actually started going down, unknown in Nigeria's history.

There was nothing wrong in SAP. It was Babangida's insincere implementation of it.

For instance, a Structural Adjustment Programme demands low budget deficits or a balanced budget. This wasn't the case under Babangida who believed in money printing to cover massive budget deficits. This fuelled both high inflation and persistent devaluation of the Naira.

Contrast that under Abacha. Because he was fiscally prudent (though corrupt)), inflation was relatively stable. The Naira stayed at $1- N80 from 1995-1998.

OBJ's policies couldn't be continued by successive government not because of lack of foreign clout (did the IMF not plead with the Sanusi to devalue the Naira in the early 2010s. or did they not meet with Buhari to end fuel subsidies and float the Naira) but rather they lacked the 2 financial discipline of OBJ or simply followed bankrupt schemes like that under Buhari.

Cracks began to appear when Jonathan increased the minimum wage from 5,500 to 18,000. This wasn't financially prudent. This was a very expensive increase, done to win workers support for the coming elections.

Next was his inability to end the fuel subsidies. He only managed to increase the price, thereby reducing the amount of money used to provide the subsidy

If he had increased workers salaries to 12k and had removed the fuel subsidies, he would have performed much better.

Buhari was a complete disaster. Once he started fixing the exchange rate upon assumption of office in 2015, I knew the economy was finished.

allthingsgood:



I am from the south south. I support Tinubu 1000%. The fact that you obedients were so obsessed with bullying people with divergent views, doesn't mean we still won't vote Tinubu. I will vote for him a thousand times over Peter obi

Kukutenla:

Sorry but I don't think appointments is a plan. I believe what you mean in essence is that the appointees will decide the next step which will mean a tactical failure on the President's plan. He should have a plan in place which they will help him implement and not the other way round. The moment an appointee is going to decide the direction an administration's central policy will take, you can be rest assured the whole thing will get lost in political power plays and fight for relevance. I hope you are not correct that the plan is to wait for appointees to draw a plan.

Kukutenla:

Good evening.
It is obvious from your responses that you're pro-capitalism. I don't have a problem with that but i think people who support capitalism are usually quick to claim so much success for it and blame extraneous factors where it fails. For example, you blame insincerity for Babangida's failure and inability to carry through on reforms for that of Jonathan. What is clear is that if capitalism is a perfect model, from IBB untill GEJ is over 20 years and that should be enough time to set Nigerian economy on the path of irreversible prosperity but you tacitly admit that is not the case.

Kukutenla:

We have to be honest enough with ourselves to know that if capitalism is faultless, then maybe we are the ones who have a problem with its application. If that is the case, we might need to either go outside for help in applying it or we look for a model that we can apply within our abilities.

Kukutenla:

You can already see from this govt that it seems more like a gamble when you apply market reforms without the right fundamentals. Nigerians are getting poorer by the day not richer and economists have turned prophets telling us of prosperity somewhere down the line. Do I agree with them? No. I believe we must chart our own course. That's why I've been asking what next.

Kukutenla:

I believe very strongly we must begin to focus energy on areas where we have comparative advantage outside of oil to boost our economy. Instead of waiting for FDI, FPI, IMF etc etc to come to our rescue, we can dig in by ourselves to build our economy on our backs. That's what i believe is the surest way to our prosperity and not all this capitalism theories that yield only marginal improvements in the long run but burst at the first sign of trouble. That's what has brought us to the merry-go-round we find ourselves from 1999 till now. We are back at the same spot. Broke, debt burdened and developmentally challenged. We need to break this circus.

grandstar:


Appointments influence the markets. At times, just nominating a very experiences technocrat can strengthen your currency and boost investments if it is someone the market trusts in.

For instance, simply nominating someone like Pat Utomi can boost investor confidence. There is market confidence he will pursue a course that will benefit the economy. The same with the CBN. A man like Alfred Rewane as CBN governor can be a game changer.

The government won't just blindly appoint someone without some due diligence and what to expect.

If Babangida is to blame, why not blame him? If Jonathan is to blame, why not blame him?

The word capitalism is usually misused. To most people, it simply means the opposite of a communist/socialist system is capitalism and it is not so. Let us stick to liberal economics or market reforms. The quality of implementation of economic policies determines its level of success. There is nothing wrong with the policy itself.

Your blaming the failure of a good policy on the policy itself is strange. If a student fails to read for his exams and fails, will you blame the exams? if Babangida was reckless with spending, why is SAP to blame? If Jonathan increased minimum wage by 300%, whose fault is it? There's nothing inherently wrong with these policies.

OBJ got outstanding results in his second term due to not only having a team of highly competent technocrats, but that he was ready to work with them. He reduced the foreign debt from $35b to $5b using debt buyback. He left $20bn in the Excess Crude Account. In the foreign reserves was a huge $60bn

I am certain when Jonathan wanted choose to increase the minimum wage from 5,500 to 18,000, the finance minister would have cautioned him against it but he turned deaf ears.

When the CBN placed fx restrictions on 41 items, the ministry of finance was furious as its input was not sought. It should have been.

Buhari abandoned market policies and became interventionist. He fixed the exchange rate, became protectionist, stubbornly refused to end fuel subsidies much much earlier in his government and did not privatize a single parastatal! We are now living with the consequences. So, the opposite of market policies was an economic disaster.

So, liberal economics was never the problem but quality of implementation.

All countries have problems with implementing free market policies or even al sorts of economic policies.

The nation has gone the opposite route before. Statist policies were introduced in 1994 by Sam Aluko and it led to a recession.

This did not work and was abandoned in the 1995 budget.

Buhari too brought in a new system which proved a complete and utter failure.

Market reforms did not fail. From 1999-2013, the economy grew on the average by 6% yearly and the economy's GDP doubled. It was clear when Buhari introduced an interventionist model and the economy swiftly collapsed and remained in a weak state throughout his disastrous 2 terms.

I do support the reforms so far despite the present outcomes. The state of the economy was simply too bad. The petrol subsidy was gulping over 20% of the budget. The multiple exchange was severely short-changing the government purse of 100s of billions of Naira and was mired in fantastical corruption. There's a backlog of over $12b of unmet demand.

These are still early days. It is too early to give judgment. It is barely 40 days.

You spoke my language when you mentioned comparative advantage. Areas where we have comparative advantage will boost exports and earn the country much needed foreign exchange. This is supply side

Sadly, the country is fixed on the demand side which is reducing demand for FX and not increasing supply. If 10% of the resources expended on making the country self sufficient in rice production was expended on crops we have comparative advantage in, food exports would have increased by a whooping $5bn if not far more.

Ivory Coast with 28m people produces 700,000mt of cashew while Nigeria's 100,000mt. Cambodia in about a decade has moved from producing 100,000mt of cashew to over 700,000mt of the nuts.

The country badly needs FDI and FPI, especially the former. The country's saving rate is too low. FDI also drives growth.

Soludo said if FDI equivalent to 5% of GDP keeps flowing in for 5 years consecutively, an economy will be grow so fast, it will overheat.

Absolutely nothing wrong with FDI. It was what built China. Hong Kong businesses rushed to set up manufacturing factories when China started opening up in the late 1970s. China at a time was getting up to $70b of FDI a year. A lot of the technological advancement Chinese companies have today were either stolen or acquired from foreign manufacturers they worked with or partnered with foreign multinationals.

Nigeria needs to encourage massive amounts of FDI and not the opposite. It is especially needed now as the petrol subsidy removal will drag economic growth down for the next 2-3 years.