Maroof Asudemade

Governor Seyi Makinde’s criticism of the Federal Government’s removal of fuel subsidy and the floating of the naira is politically convenient but economically inconsistent. As a sitting governor, he is among the biggest beneficiaries of the very reforms he now condemns before campaign audiences.

The governor argues that removing fuel subsidy and liberalising the foreign exchange market simultaneously inflicted hardship on Nigerians. While no honest observer would deny that the reforms imposed short-term pain, it is equally true that they addressed structural distortions that had become unsustainable. The real question is not whether the reforms were difficult, but whether Nigeria could have continued with a subsidy regime that was consuming trillions of naira annually while enriching smugglers, middlemen and a privileged few.

For years, economists, multilateral institutions, and even many politicians, including those now in opposition, acknowledged that fuel subsidy was fiscally unsustainable. It diverted scarce public resources from education, healthcare, infrastructure and security into a consumption programme that disproportionately benefited wealthier Nigerians and neighbouring countries through cross-border smuggling. Continuing the subsidy would only have worsened the nation’s debt burden and weakened public finances.

Governor Makinde’s criticism is particularly difficult to reconcile with the enormous increase in revenues accruing to states since the subsidy was removed. Monthly allocations from the Federation Account Allocation Committee have risen significantly, enabling states to receive unprecedented financial inflows. Oyo State is one of the major beneficiaries of this fiscal expansion. No citizen of Oyo State ever envisaged that the state would start receiving well over 30 billion naira as monthly allocation from the federation account. Local governments in Oyo State which used to collect 100 million naira monthly allocation, less or more, are now receiving over 500 million naira monthly. Where did Governor Makinde think revenues to make these huge allocations would come from if fuel subsidy was not removed?

If the subsidy removal is such a disastrous policy, should Governor Makinde not reject the additional allocations made possible by it? Has Oyo State returned the increased revenues to the Federal Government? The obvious answer is no. Instead, the state has utilised these enhanced resources to fund projects, salaries, infrastructure and other government obligations. It is therefore contradictory to enjoy the financial gains of a reform while publicly condemning the very policy that made those gains possible.

The governor also criticises the decision to float the naira, suggesting that exchange-rate fluctuations demonstrate policy failure. This argument overlooks the economic realities inherited by the current administration.

Before the reforms, Nigeria operated multiple exchange rates, creating enormous opportunities for arbitrage, rent-seeking and corruption. Businesses struggled to obtain foreign exchange through official channels and were often forced into the parallel market, where rates differed sharply from the official window. Such distortions discouraged investment, reduced transparency and undermined confidence in the economy.

The exchange-rate reforms have substantially narrowed the gap between the official and the parallel market rates, reducing opportunities for speculation and arbitrage. Although the naira has experienced periods of volatility, the foreign exchange market has become more transparent and increasingly driven by market realities rather than administrative controls. Greater price discovery has also improved investor confidence and enhanced the credibility of monetary policy.

Economic reforms of this magnitude rarely produce instant comfort. Countries that have undertaken similar structural adjustments have often experienced temporary hardship before achieving greater macroeconomic stability. The relevant question is whether the reforms are laying a stronger foundation for sustainable growth. Available fiscal indicators suggest improved government revenues, stronger external reserves, increased investor interest and greater transparency in foreign exchange transactions compared with the pre-reform era.

Governor Makinde’s assertion that Nigerians could previously “sleep with their two eyes closed” also fails to withstand scrutiny. Nigeria’s security challenges did not begin in 2023. Terrorism, banditry, kidnapping, farmer-herder conflicts and separatist violence had plagued the country for well over a decade. Successive administrations have struggled with these threats. While significant security challenges remain, portraying the current situation as entirely new is historically inaccurate.

Furthermore, hardship alone cannot be used as proof that a policy is fundamentally flawed. Many reforms are initially painful because they remove entrenched distortions that have accumulated over decades. Responsible leadership demands not only identifying problems but also implementing solutions that secure long-term national prosperity rather than temporary political popularity.

It is also worth remembering that state governments, including Oyo, possess significant constitutional powers and financial resources to cushion the effects of national economic reforms. Increased federal allocations provide governors with greater capacity to invest in public transportation, agriculture, healthcare, education, food security programmes and targeted social interventions. Rather than focusing solely on criticising Abuja, citizens are entitled to ask how effectively these additional resources have been deployed to mitigate hardship within their respective states. What investments has Governor Makinde made in public transportation, agriculture, healthcare, education, food security programmes and targeted social interventions from the sprawling allocations he has been receiving from Abuja to cushion the hardships occasioned by fuel subsidy removal and naira floatation on the people of Oyo State?

Governor Makinde is entitled to campaign for higher office and to present alternative economic ideas. However, intellectual consistency requires acknowledging that the fiscal strength his administration presently enjoys is, in no small measure, a product of the same reforms he now seeks to discredit.

One cannot denounce the tree while happily harvesting its fruits. If subsidy removal and exchange-rate reforms have truly failed, then the beneficiaries of the increased revenues generated by those reforms, including state governments, should explain why they continue to rely on them to finance governance.

Political rhetoric may excite campaign crowds, but sound economic analysis requires fairness, context and consistency. Nigerians deserve an honest debate based on facts rather than selective narratives. History will judge these reforms not by the discomfort of their early stages alone but by whether they ultimately place Nigeria on a path of sustainable growth, fiscal discipline and economic resilience. Governor Makinde’s mindless condemnation of Federal Government’s policies only points to his stark illiteracy in financial and economic matters.

Dr Ngozi Okonjo-Iweala and Emir Sanusi Lamido Sanusi, world renowned economists, have commended the Federal Government, and especially the Central Bank, for the positive economic developments that the recent reforms have brought upon the country. They expressed that a solid foundation has been laid for Nigerian economy to thrive, having survived the brink of collapse that the country was plunged before 2023.