In some way, I pride myself as someone in touch with the trends and slangs on social media. But I was caught napping when I was discussing Brighton & Hove Albion FC in the Premier League (I once schooled in Falmer, Brighton) with a friend. I told her that “we will be playing in the UEFA Champions League in 2024 by God’s grace”. My friend, a staunch Obidient, replied: “This reminds me of a running joke on Twitter.” What is it? “So, when Tinubu was inaugurated, this person came online and wrote: ‘This new government will favour me and my family in Jesus’ name.’ Now, whenever anything (negative) happens, people go to that tweet and quote it.” I laughed. I don’t know how I missed that.

When President Bola Tinubu announced the removal of petrol subsidy in his inauguration speech and the pump price skyrocketed from around N200/litre to over N500/litre, people joked: “This new government will favour me and my family in Jesus’ name.” When the exchange rates went haywire with the attempted bridging of the official and parallel markets, people teased again: “This new government will favour me and my family in Jesus’ name.” And so it goes for hikes in transport fares, food prices and cost of foreign education. When petrol prices went up again last week, an Obidient wrote on her WhatsApp status: “This new government will favour me and my family.” Hilarious!

Times are tough and could even get tougher. For me, what the impact of the subsidy removal has proved once more is that cheap energy had been keeping the cost of living somewhat stable in Nigeria for long. Experts often argue that fuel price hikes only have a one-off effect on inflation, but the leaps in five weeks are so adverse that millions of Nigerians are in severe pains. All our lives — at least from the time we hit oil boom in the 1970s — we had been used to cheap petrol. We had been mostly protected from prices of crude oil — the raw material for petrol, diesel and other fuels — so much that it was always a major event when a policy tampered with the pump prices of products.

In most other countries, including many oil-rich nations, citizens are used to waking up one day to discover that pump prices have changed. By the following week, prices can change again. As crude prices rise, pump prices rise. As crude prices drop, pump prices drop. This is because crude prices determine product prices. Additionally, their governments charge VAT and fuel duty on every litre. It is no news to them when pump prices rise or drop. It is something they are used to. But this is an entirely new experience for us in Nigeria. We usually argued and fought over whether or not pump prices should be adjusted. Political considerations often carried the day. Public peace is precious.

I have been carefully observing reactions to the rising cost of living. Supporters of the Peoples Democratic Party (PDP) and the Labour Party (LP) have come down heavily on the ruling party, the All Progressives Congress (APC). Even some APC supporters are now expressing regrets for supporting President Bola Tinubu. Sarcastic memes are all over social media. Some analysts who had always prescribed the removal of subsidy and the liberalisation of the FX market are having second thoughts because things appear to be spinning out of control — beyond projections. It seems they expected immediate positive impact, such as FX inflow and, consequently, lower rates. They are now fidgety.

I was not surprised that petrol prices went up again. When crude prices hit $80/barrel, worsened by a falling naira, I started panicking. I knew it would reflect on pump prices in a matter of weeks. Actually, high crude prices are not good for the global economy. Only some oil-producing countries and oil companies love high crude prices. My prayer has always been that crude should sell for around $60 in the interest of world peace. As things stand now, anytime crude prices go up, fuel prices will follow sooner than later. If the price of yam goes up, the price or quantity of pounded yam will react. With subsidy gone, Nigerians have lost their age-old protection against high crude prices.

Does it mean that if crude prices hit $120/barrel, we will have to buy petrol at N1,200/litre? That is why some governments intervene. If Nigeria’s oil export is good enough and we earn billions of dollars from the $120/barrel windfall, government can choose to step in. The notion that government should never interfere is an extreme economic ideology. In the UK, for instance, a litre of petrol is £1.45 (about N1,447). This includes a fuel duty of 53p (about N529) and 20 percent VAT (we don’t charge these taxes in Nigeria). What the UK government did recently because of high crude prices was to cut fuel duty to contain the pump prices. The fuel duty cuts will end in March 2024.

I have heard some Nigerians argue that if our refineries were working, we should be buying petrol at N150/litre. That is quite some argument. That was similar to my position 15 years ago. Someone said the N500 billion meant to be distributed to the poorest Nigerians should be spent on building refineries to make petrol cheap. However, this idea raises questions. If crude oil, an internationally traded commodity, is $80 per barrel, at what price would we sell it to local refineries for Nigerians to buy petrol at N150/litre? I don’t know the economics of it but let us say, out of hand, that it would be $15/barrel. That is a whopping discount of $65 per barrel. Well, that is still subsidy and lost income.

While I am enjoying the brickbats between pro- and anti-Tinubu forces on social media, the counterfactual of the situation is: would Alhaji Atiku Abubakar (PDP) or Peter Obi (Labour Party) have retained petrol price at N185/litre and maintained multiple exchange rates? Were either to win the election petition and be inaugurated as president, should we expect petrol to return to N185/litre and “official” FX rate back at N420/$? I am yet to hear from Atiku on this, but Obi has said, concerning petrol subsidy, that he would have put some palliatives in place prior to the removal. This sounds fine. That means he agrees with these difficult policies but prefers a different approach.

Politics apart, the truth is that NIGERIA IS BROKE. There was a time we could afford the subsidy bill. When oil exports were bringing around $5 billion monthly into the federation account, we could afford to burn $200 million on subsidy every month, even if experts often argue that it is a waste and that the money could be better spent. But, at least, we had the war chest. We used to robustly “defend” the naira by meeting all FX demands and keeping the rates around N165/$. What many Nigerians don’t understand is that as at today, we don’t have that kind of money again. We earn virtually nothing from oil exports. We even mortgaged future production as so to sell petrol for N185.

When some Nigerians argue that the country is rich and can afford to pay for this and that, they are probably unaware that we are spending almost all our revenue on servicing debts. If we are paying salaries and contractors regularly today, it is because we are taking loans upon loans. How can you be spending 95 percent of your salary on paying debts and then borrow to buy food and pay your maiguard and still claim to be rich? Something has to give if you want to continue to be a living thing. In this same country in the 1980s, we queued to buy essential commodities, such as milk and rice, because there was no forex to import in abundance. We were heading towards that quagmire again.

Delayed adjustments can be very painful. Whereunto shall I liken Nigeria’s case? It is like unto a man whom the doctor has assessed and advised to watch his cholesterol. The doctor recommends dietary and lifestyle changes to keep it under control, but the man ignores it since he cannot see or feel any problem. His cholesterol goes higher and higher. The doctor then prescribes daily cholesterol-lowering medication. The man only uses it when he likes. Years later, he starts having excruciating chest pains owing to repeated heart attacks. He now needs a painful, very costly but life-saving surgery on the coronary artery to mitigate his coronary heart disease after ignoring doctor’s advice.

Or shall I liken the Nigerian economy unto a man diagnosed with borderline hypertension and advised to make necessary adjustments? The man says he cannot eat meals that are not rich in salt and he cannot imagine himself snubbing a chilled bottle of beer. He eventually gets diagnosed with hypertension and is advised by his doctor to take his anti-hypertensive medication daily but he chooses to do as his spirit directs, sometimes skipping weeks. The kidneys, which have been bearing the brunt of high blood pressure for years, then pack up. He now requires dialysis every other day or a kidney transplant to stay alive. Both are very expensive, disheartening and painful processes.

Having said all of this, though, I believe Tinubu could have implemented and communicated his economic reforms better. As Obi said, the way and manner the subsidy was removed was akin to extracting a tooth without anaesthesia. While I agree that subsidy removal will always come with pains no matter the timing and the strategy, a lot of prior groundwork should have been done to lessen the pains. At the heart of economic activities in Nigeria are fuel prices and exchange rates. I may be wrong, but I sense that Tinubu did not have a timetable. It is good that he is now trying to cushion the effects but it looks to me like an afterthought. He clearly put the cart before the horse.

Although “this new government will favour me” has become a joke because of the harsher economic times brought upon us by these reforms, I am ready to bear the pains insomuch as I am assured that I would not suffer in vain. I am ready to sacrifice in the hope that my leaders will sacrifice too. That is why I am proposing here today that we should channel our pains into positive energy in order to engage in constructive civic engagement with our leaders at all levels — not just Abuja, as is our wont. All tiers of government will share from the benefits of these twin policies. The adjustment pains must motivate us to have a change of attitude towards the campaign for public accountability.

Where do I fit in? Where do you fit in? For a start, we need to be rigorously dissecting the budgets at federal, state and local levels. What is the justification for every budgetary item? How is the revenue being spent? Was the road in the budget built? Was the health centre revamped? Were the teachers recruited? Why are we building an airport when people are drinking from the stream and dying of cholera? As a journalist, I hereby re-commit myself to asking the hard questions. More Nigerians must come on board. If the pains of these reforms do not push us into demanding good governance, then we will, of all nations, be most miserable — and our latter end will be worse than the former.

AND FOUR OTHER THINGS…

SUBSIDY SACRIFICE

I was happy to hear that the three tiers of government have agreed to save N1 trillion from the record N1.9 trillion that accrued to the federation account in June 2023. We need to stop “eating with ten fingers”. And to avoid the benefits of the economic reforms going into frivolous and wasteful expenses, an infrastructure support fund (ISF) will be set up with specific mandate to intervene in transportation, agriculture, health, basic education, power and water resources. Otherwise, everything could go into overheads and building palaces for our governors (as usual). Nigerians now have to closely monitor implementation to make sure this will not be a mass scam. Accountability.

TRIBUNAL TROUBLES

All eyes are now on the presidential tribunal to deliver judgment on the petitions filed by the PDP and the Labour Party challenging the declaration of Bola Tinubu (APC) as the winner of the 2023 presidential poll. From an unproven allegation that the chief justice disguised on a wheelchair to meet with Tinubu in London to fictitious reports that a member of the panel had resigned because he was put under “political pressure”, this must count as the most dramatic petition in this democratic dispensation. My astonishment is the way parties before the tribunal are making highly sub judicial statements in the media. I honestly have never seen anything like this before. Amazing.

OIL AND JAZZ

Did you read that a private security outfit intercepted a vessel with crude oil stolen from Ondo state a couple of weeks ago? The outfit, reportedly owned by a former Niger Delta militant, said it burnt the 800,000-litre vessel and its contents to sound a “note of warning” to other oil thieves. NNPC said the vessel had been operating “undetected” for 12 years. I have some questions. One, why destroy 800,000 litres rather than reclaim the contents? Two, how can a vessel operate for 12 years (NNPC was so exact) without detection? Above all, where was the navy in all this? There is something they are not telling us, and it is more saddening that Nigerians are not asking these questions. Vigilance.

AND FINALLY…

After the Igbo/Yoruba online war over the Mmesoma Ejimeke/UMTE result forgery saga — during which many Nigerians gleefully displayed their barely disguised ethnic chauvinism — I noticed some calm last week. It may well be the peace of the graveyard but at least we had some breathing space. Long may it last! But don’t bet on it: all it takes to start another ethnic baiting and cyber combat is for a Yoruba or Igbo driver to beat the red light. We would then start hearing “bigot” and “no man’s land” again, complete with Civil War tales and counter-tales. I do not expect this bitter war to end this year or next, but we need to enjoy this peace — or is it armistice — while it lasts. Amusing.

The last time we checked, Lagos State was supposed to be the ancestral home of our President Bola Tinubu. Some dispute that, insisting he is from Osun State. But none, to the best of my knowledge, has ever linked himto Ogun State. Yet, it seems the gods of Ogun River and the ancient gods of Lisabi have adopted him as their son. Ina mystical and deeply spiritual way, Ogun State played a prominent role during the run-in to the Presidential election.

It was during one of his ‘pilgrimages’ to Ogun State, that he received the courage and clarity to make the famous ‘Emilokan’ statement. To the uninitiated, I confess I am one of them, that statement seemed a sign of a meltdown – an apocalyptic meltdown to quote a mutual friend. As the English would say ‘What was he smoking? Or sniffing? Or drinking’? It however turned out instead to be a coded message to those he had a pact with, a succession pact of sorts. I still have a problem with the ‘Emilokan’ statement though.

It suggests entitlement. It suggests a high-stake, turn-by-turn alliance, it suggestshorse trading with Nigeria as the prize. Whatever. Those to whom the coded message was sent understood it.The message unlocked their hearts. It reminded them that the time to pay back some I.O.Us for old favours and promises was nigh. As a result, the many obstacles strewn on his path during the journey to the party’s primary began to clear. He won the primary with a clear margin. It was an important victory no doubt, but not the main prize.

The Kingmakers and pretenders to the throne would however not let go easily. They threw everything including the kitchen sink to stop him from attaining the much coveted crown. He too counter strategized, stoking the discord within the main opposition party. When the odds were mountingand it seemed the anti-people policies of the ruling party were meant to cause disaffection among the electorate towards him, he made another ‘pilgrimage to Ogun State.

Again, he received courage and clarity to pitch a fight with some State and non-State actors in the presidency. After all, ‘if the gods cannot help you, they should leave you as you are’ according to the saying among his people. (Orisa bi o le gbe mi, se mi bi o se ba mi). It was there that he denounced the contrived fuel scarcity and the currency swap. (‘Whether you hide fuel or hide money, we will vote and we will win’ he said). It worked, again. Immediately after the statement, help came from some powerful State actors and the strictures were eased. He did not exactly coast to victory thereafter but he did enough to win the coveted crown.

After a month in the saddle as President, it was time for another ‘pilgrimage’ to the Ogun gods. This time it was a celebratory one. The race has been won and it was proper to thank the gods. After all, gratitude is the food of the gods. But this didn’t stop discerning minds and attentive ears from expecting another defining statement; another moment of courage and clarity. What I heard though was a little disconcerting. It was self-adulation. Like a lizard which, after performing a feat, nods its head as if to say ‘if no one praises me, I will praise myself’.

In the case of the President, many Nigerians had praised the courage and clarity he had shown in the past month to take difficult decisions. He didn’t need to praise himself and in the process, throw some brickbats at his predecessors as if they were weaklings. Removal of fuel subsidy was a decision whose time had come. Simple. It wasn’t that much a question of weakness or courage any longer. After all, the three main presidential aspirants promised to remove the subsidy.

Eight, ten years ago,it was a different proposition and we all know the side he was on and the role he played during the subsidy removal agitations at the time. Besides, it is not the time to gloat for as long as the consequences of subsidy removal have not been addressed let alone, ameliorated.(And if he doesn’t do something soon to ease the growing hardship in the land, he might need another visit to the gods of Ogun State).

But what jarred my listening ears was the absence of inclusion in his Ogun State speech. Most leaders would use the ‘royal we’ when referring to policy decisions and projects. It is deferential. It is inclusive. What I heard in places was the pronoun ‘I’ which to me sounds exclusive, arrogant and even imperial. Worse, it suggests a dictatorial, rather than a collegiate mentality which is contrary to what I hear about him. Everybody knows where the buck stops in the presidency and Nigeria needs a strong President at this time who will have the courage of his conviction and be able to resist the self-serving demands of Kingmakers.

President Bola Tinubu scaled many hurdles on the way to the presidency. Outside the court, the last important hurdle now is himself. The times call for simplicity. They call for empathy. I don’t see enough of both. As necessary as they have become, his major policies in the past month are painful. They have further depleted the already meagre earnings of the people. That is the truth and they in no way call for chest beating of any kind. The purpose of governance is to raise the living standard of the people in a secure environment. Until that is done- and the welfare needle begins to inch northwards- the times call for sobriety and self-effacement, not hubris. It is certainly not the time to preen.

Data is the new oil, it runs economies, gives sense to policies, and provides the foundation for planning. Data is the mother lode of civilization as we know it. For these and several other reasons, a slap-dap approach to data gathering, preparation, cleaning, storage, and analysis is unacceptable. The recently released headline inflation numbers by the National Bureau of Statistics (NBS), the June 2023 headline inflation rate of 22.79% up from 22.41% in May 2023, smacks of a bold but unusual decoupling of clarity and reality.  While physical blindness is a limitation it does not define success or lack of it, whereas data blindness brings countries, corporations, and people to ruin. 

The inflation figures for June which the NBS in a tweet noted reflected only two weeks of subsidy removal impact have left analysts scratching their heads in confusion as they attempt to comprehend why two consecutive sample data for a month provide a description of the average monthly inflation estimate. Indeed, according to one economist in government circles who requested anonymity because he was not officially permitted to make public comments, ‘We appear to have gotten ourselves in a right old mess. We have chucked credibility out of the window, broadened the fronts for the attack on Nigerian data integrity, and generally made ourselves the butt for drunken pub conversations amongst foreign investors. How do you trust real return adjustments for financial assets, when inflation figures appear to come from somewhere between Pluto and Mars?’, he asked rhetorically. 

According to the public servant, ‘Playing chess with national economic numbers cannot be smart after years of building credibility in our national statistics seen as emblems of institutional integrity, burning all this on the altar of expediency is unacceptable’, he insisted. Indeed, an economist in one of the country’s big four Consulting firms noted that ‘In addition to the conceptual problems associated with two consecutive weeks of no survey data within June, there is a broader problem with the weights assigned to the components of the inflation basket. It was almost completed between 2019 and 2020, but it appears that the review exercise was suspended, and what we see now is Grandma’s shopping list being handed over to her grandchildren.  Few Gen-Zers would be pleased with their grandma’s list of vegetables and fruits, and would be asking, where in heaven’s name is the pizzaz, French fries and chicken?! ‘, the analyst insisted that even a review of the country’s inflation basket at the moment may be inadequate as the country has since had a focus-induced recession which could have changed consumer spending patterns. He argued that the composition of the items in the country’s inflation basket needed to be reviewed every five years. 

Reactions have continued to trail the June CPI Inflation report released by the NBS. Although, according to the Bureau, annual inflation rose to 22.79%, a new 17-year high, analysts have been bothered by the integrity of the June print. The numbers, which unexpectedly came in lower than the 25% earlier forecast by several economists, failed to capture the impact of the removal of the PMS subsidy. This decision President Bola Tinubu announced in his inauguration speech at the end of May. Analysts had pencilled in higher inflation on the back of a 150% increase in PMS prices, a 32.7% y-o-y rise in Broad Money to N65trn and a 45% devaluation of the Naira. 

In this light, the importance of credible data, according to stakeholders, cannot be over-emphasized; the country is at a point where it is courting foreign investors to unlock opportunities in critical sectors, and this becomes difficult where the integrity of official data is in question. Independent estimates of inflation range between 40 and 45%.   But the reason why the recent numbers have been widely criticized is a statement published by NBS through its social media handle on Twitter. The statement, which prompted criticism by economists and statisticians, suggested that ‘the June Consumer Price Index (CPI) numbers may not fully capture the impact of the fuel subsidy removal and the unification of the exchange rate. According to the Bureau, this is because the data collection for computing the rate for the reference month typically stops around the middle of the month, meaning that the June numbers only reflect approximately two weeks of the policy impact on consumer prices.

While the NBS statement seemed to have been aimed at saving face, it did very little to salvage the institutional reputation. This is because even a two-week survey should have captured the 150% increase in the pump price of premium motor spirit (PMS) oil or petrol. While it is understandable that subsequent months would more fully capture the rise, it would typically take between 3 and 6 months for the impact of the price adjustment to be fully absorbed by the economy, the initial impact is expected to be greater than as presented by NBS. Moreso, analysts believe that a 28 basis point increase in headline inflation (Y-O-Y) and a seven basis point decline in monthly core inflation more than underestimate the combined impact of all of the price changes which occurred in June, namely a 40% increase in import duties, Naira devaluation and the PMS subsidy removal.

The choice of the first two weeks in June 2023 is difficult to rationalize. What seems to be a newly introduced approach by the NBS has served by default or design to underestimate inflation. Moreso, it neither captures the increase in the ex-depot price in the final week of June nor grasps the removal of value added tax (VAT) exemption on diesel which kicked in around the same time. The approach distorts the reality of a significant indicator. Inflation numbers not only guide the inflation-adjusted returns expected by investors, but it also meant to paint an accurate life picture of the cost of living of households, the operating cost of businesses, and the project completion cost of the public sector. When inflation numbers are underestimated, reality is altered, and planning is impossible.

The only way inflation rise between May and June 2023 could have been limited to just 38 basis points as contained in the NBS CPI report is if there was a base effect. However, this would not be tenable, as there was no high base effect last year. Moreover, such a base effect would not affect m-o-m figures in such a circumstance. A more substantial base effect last year will also presume that there were factors between May and June 2022 that induced a stronger push than the 200% subsidy removal we saw in June 2023, the like of which is difficult to identify. 

Methodological Mysteries
The composition of the 2003/2004 basket surveyed is outdated and it ought to have been reviewed to reflect the changes in the consumption pattern, likewise, the weights assigned to the 740 items surveyed require a review of reliable sources have it that the process had been initiated two years ago we are unsure of whether this process has been completed. This adjustment becomes even more important given that the country has recorded two recessions in 2016 and 2020. The change in spending patterns and consumption baskets is marked enough to cause a lot of expenditure rationalization. The Bureau’s dysphoric or unhappy estimates may be attributable to its failure to meet global standard practice which requires that the basket ought to be updated each half-decade.

The controversy generated by the NBS estimate of inflation in June is unfortunate but it raises a fundamental question of Data credibility and integrity, a problem which transcends the NBS and extends to all governmental agencies. Credibility is at the heart of proper planning and policy making and when the data is wrong the decisions premised on It would most certainly be erroneous. The Monetary Policy Committee (MPC) meets next week for its fourth policy meeting of the year, Analysts believe that inflation has bombed the purpose of the 700bp hike by the MPC since May 2022. The expectation from most analysts is that the absence of a substantive head at the CBN would be a reason why only a cautious rate hike or a hold would be considered at the next meeting.

In the broad scheme of things, June’s inflation numbers still pour rainwater on the MPC’s hopes of moderation of prices and a dovish monetary policy direction. Burying the impact of the depreciation of the naira and subsidy removal on the domestic price index is a lavish indiscretion. 

Awoyemi is the current CEO, Founder and Chairman of Proshare Limited, Nigeria’s foremost financial information hub.