From Russia with love, a blockbuster James Bond movie, dominated conversations in the 1960s as a graphic characterization of the true Russian gesture. However, in recent times, the mantra is shifting to “from Russia with bullets” and “from Ukraine with wheat”. The shifting paradigms engendered by the ongoing Russian-Ukraine war are reincarnating the call for self-sufficiency.
Policy Misalignment in the Agricultural Sector
Over the years, Nigeria has implemented several policies targeted at boosting agricultural output to achieve food security. From the Back-to-Land policy of 1984 to the ANCHOR borrowers programme in recent time, Nigeria remained threatened with food insecurity, low agricultural productivity and high food imports. India has a similar story in the late 1990s, but its pragmatic National Agricultural Policy (NAP) became a gamechanger in the mid-2000.
With the NAP focusing on strengthening rural infrastructure and diversifying along key agricultural value chains, India has become one of the world’s top 3 players in food production. The Indian experience provides a great hope for Nigeria. If Nigeria adopts some of their policies, and ensures their implementation, consistency and suitability, there are hopes that the nation’s agricultural sector can be transformed into a global food basket.
Petrol Subsidy: Meant for The Poor, Enjoyed by The Rich
Nigerian policy makers seem to be in a pickle, being caught between the devil and the deep blue sea. The petrol subsidy regime that was introduced in 1977 as a welfare-enhancing measure has become so entrenched that all calls to discontinue the controversial regime has proved abortive. But the intractable question is, “who actually benefits from the petrol subsidy?” The government? The marketers? Or the citizens? Between 2006 and end of 2022, a total of N15.908trillion would have been spent on petrol subsidy. However, there is no evidence that consumer welfare has improved in any way.
The worsening livability outlook in Nigeria could be reinforced by the high opportunity cost of petrol subsidy regime. With fiscal deficit and public debt stock increasing by 7,568% and 1,695% respectively in the past 16 years, about N4trillion was budgeted for petrol subsidy in 2022. This humongous subsidy budget exceeds the budget of more than 19 states in Nigeria in 2022. But, how will the government convince the citizens that are rattled by “power blackout” and escalating costs of transport, that subsidy removal will do them more good than harm?
In this edition of the FDC bi-monthly publication, the FDC Think-Tank analyzes these issues and their implications on businesses and the economy at large.
Enjoy your read!