Economist Magnus Onyibe has emphasized the need for Nigeria to adopt policies that can quickly transmit macroeconomic gains into microeconomic opportunities. In his article, he noted that while the macroeconomy is now working, the microeconomy is still hurting. Onyibe cited the example of Aliko Dangote's 650,000-barrels-per-day refinery, which took seven years to build. He argued that the $50 billion in Memoranda of Understanding, $2.06 billion in Foreign Direct Investment, and JPMorgan bond listing could bring $17.5 billion into the economy but will not translate into money in the market woman's purse or food in families' cooking pots until someone converts macroeconomic gains into microeconomic opportunities and jobs.
Onyibe recalled that Gen. Yakubu Gowon's administration introduced a petrol price subsidy in 1973 to cushion the impact of the oil price shock on Nigerians. However, he noted that the policy had no specified termination date, which is why it remained in operation until President Bola Tinubu announced its removal in his inaugural speech on May 29, 2023. Onyibe commended the current government for announcing a 30-day discount on petrol prices with an end date, demonstrating that it has learned from past mistakes.
The economist proposed three bridges to cross in transmitting macroeconomic gains into microeconomic opportunities. He suggested adopting Gen. Gowon's development template from 53 years ago, when he intervened as Head of State to protect Nigerians from the oil price shock. Onyibe also recommended a salary award, similar to the Udoji Award introduced by Gowon's administration, to provide relief to long-suffering Nigerian workers.
Onyibe noted that Gen. Gowon's second approach to alleviating hardship was the introduction of the Udoji Award, which provided relief to Nigerian workers. However, its implementation was cut short following the ouster of Gowon's administration in a military coup in 1975. The Tinubu administration has not yet adopted a Udoji-style salary award, instead opting for a high-cost-of-living intervention described as a discount and modulation.
The economist identified the first bridge as the Fiscal Bridge, which involves transmitting funds from the Federation Account Allocation Committee (FAAC) to the pocket and cooking pot. He noted that monthly allocations from FAAC to states have increased substantially, but the ordinary Nigerian does not feel the impact. Onyibe suggested ring-fencing 50 percent of the roughly N10 trillion saved from subsidy removal for conditional vouchers, such as vouchers for farm inputs or compressed natural gas conversion kits.
Onyibe's proposal aims to shorten the 36-month transmission lag to 12 months. He argued that the government should borrow from Gowon's approach but modernize it to address the current challenges facing Nigerians. The economist's suggestions have sparked public debate, with many Nigerians eager to see the implementation of policies that can bring relief to the masses.
The article highlights the need for the government to adopt policies that can quickly transmit macroeconomic gains into microeconomic opportunities. Onyibe's proposals offer a potential solution to addressing the challenges facing Nigerians, particularly in the wake of the removal of the petrol subsidy. The government's response to the economist's suggestions remains to be seen.
Key points
- Economist Magnus Onyibe proposes adopting Gen. Gowon's development template to address current challenges
- Onyibe suggests a salary award, similar to the Udoji Award, to provide relief to Nigerian workers
- The economist recommends ring-fencing 50 percent of funds saved from subsidy removal for conditional vouchers
