Akpan Ekpo: Tinubu Was Wrongly Advised on Petrol Subsidy Removal

Few months to his retirement as Professor of Economics and Public Policy at University of Uyo, Akwa Ibom State, Prof. Akpan Ekpo, who is a former member of the Board of the Central Bank of Nigeria; former member of the Monetary Policy Committee; former Director General of West African Institute of Financial and Economic Management, former Chairman of the Academic Staff Union of Nigeria, in this interview, proffers solution to the economic hardship and exchange rate crisis the country is facing presently. Ekpo, who is currently the Chairman of the Foundation for Economic Research and Training in Lagos, advises President Bola Tinubu to urgently address the hunger in the land. Dike Onwuamaeze brings the excerpt:

In a recent opinion article you wrote on the state of the economy, you warned that the government should act urgently before it is too late. What will you tell President Bola Tinubu or his economic management team if you have the opportunity to meet with them today?

I will tell him that his policies have not worked and if I was to part of the team that advised him on those policies I wouldn’t have recommended them. advised such. So, if they are bold enough the best is to reverse some of these policies. The suffering is too much; they should reduce petrol prices. If you crash it, all prices will come down. The structure of the economy for now, in our context, depends on petrol. They should be bold to reverse the petrol subsidy removal. Secondly, I will tell them to go back to a managed float exchange rate system. The inflation we are seeing now is what we call exchange rate pass through. The economy is not productive; it is not diversified, because there is a difference between an economy being diversified and the Gross Domestic Product (GDP) being diversified. The GDP has 46 sectors, but the economy itself is not that diversified. So go back to managed float. I am stressing the word “managed.” The problem of that market is on the supply side that is virtually vertical. The demand side is there and you can curtail it if you want to. But the problems are supply and access. Therefore, return back to managed float. No country opens up its foreign exchange market, especially a developing economy, completely to the forces of demand and supply. Those two things – returning petrol subsidy and reversing floating of the exchange rate - are very crucial if they can be bold to reverse them. Before the inception of the President Bola Tinubu’s administration, the rate at Investors and Exporters’ (I&E) window was just above N400 per dollar, now the rate is approaching N1,700 or higher. Definitely, anybody that imports by buying dollar at that rate, the price of your goods or