By Iranloye Sofiu Taye

The post-fuel subsidy removal era in Nigeria was envisaged as a transformative phase and paradigm shift was anticipated. An era that will be characterized by shared prosperity among the masses and paving the way for national development. A departure from the previous era of favoritism towards oil moguls in the downstream and upstream sectors who enjoys the proceeds of the subsidy. However, contrary to expectations, this transition has plunged the nation into an unprecedented economic quandary, marked by escalating hunger and debilitating hyperinflation that have eroded the purchasing power of ordinary citizens. As a consequence, the trust of the populace in the policies of Tinubu’s administration has been rapidly eroded. It is worth noting that all three major contenders in the recent presidential election, including Atiku Abubakar and Peter Obi, endorsed the removal of fuel subsidies in their respective manifestos. Nevertheless, given the mounting dissent against the prevailing circumstances, urgent action is imperative to avert a potential mass demonstration reminiscent of the EndSARS protests.

It is evident that during President Muhammad Buhari’s administration, Nigeria has heavily relied on borrowing and foreign aid to finance its annual budget. A significant portion of these budgets is allocated to servicing debt, prompting the three major contenders in the recent presidential election to pledge the removal of fuel subsidies upon assuming office. Their rationale was to access funds for development, as the budgetary allocation for fuel subsidy alone could be utilized to build sustainable infrastructure across Nigeria. After the “Subsidy is gone” declaration by the President at Eagle Square during his inauguration speech in May, 2023, the withdrawal of fuel subsidies in Nigeria has ignited a myriad of contentious perspectives, particularly in light of the rampant hyperinflation of commodity and service prices, imposing severe economic hardships on the populace. Unlike the sudden shock of the COVID-19 pandemic, the elimination of fuel subsidies was a planned measure, designed to mitigate its adverse impact on the masses.

Removing fuel subsidies inevitably leads to a hike in the pump price of fuel, higher cost of living, as fuel prices often serve as a determining factor for commodity prices and the cost of public services. To cushion the above challenges, the federal government has implemented several initiatives, including injecting billions of naira into the agricultural sector, revitalizing dormant refineries, suspended conditional transfers, and releasing rice and other grains from national reserves to alleviate their market prices. Despite these efforts, the aftermath of this policy shift has proven to be regressive. The monthly allocation shared between the federal government, states, and local governments has increased by over 100% compared to the allocations received during the subsidy era. This augmented allocation represents the funds that were previously used to subsidize imported petroleum products, ensuring their affordability for the masses. These funds were expected to support the populace, mitigate the impact of subsidy removal in each state, bolster the agricultural sector, and address the infrastructural deficit plaguing Nigeria. Regrettably, over the past nine months, this substantial allocation has yielded little to no improvement in the welfare of the people, let alone witnessing any tangible infrastructural advancements. What exacerbates the situation is the silence of our governors, as if the federal government did not provide them with commensurate allocations to alleviate this foreseeable predicament. Could this be a case of sabotage?

Given that much of this crisis stems from panic buying and unregulated pricing practices across states, it is imperative to establish and empower an agency to control commodity prices. This would effectively curtail arbitrary and intentional price hikes imposed on consumers. Prompt implementation of a new minimum wage is imperative for both the public and private sectors. No state governor should be allowed to evade their responsibility of paying the new wage, especially considering the increased allocation they now receive. This measure ensures that the benefits of economic growth are shared by all, enhancing the well-being of workers across the nation. Moreover, it is high time each state government embarked on an ambitious infrastructure development plan, targeting every local government within their jurisdiction. By initiating construction projects, the state governments can stimulate economic activity and create employment opportunities at the grassroots level. These infrastructure endeavors will not only enhance connectivity but also lay the foundation for long-term growth and development in each locality.

Both the state and federal governments should prioritize the provision of improved seedlings, as well as robust security measures to safeguard farmers and their plantations. By subsidizing and ensuring the availability of high-quality seedlings, we can boost agricultural productivity and foster food security. Additionally, reinforcing security measures will protect farmers from the menace of banditry and other criminal activities, allowing them to cultivate their land without fear. To ensure accountability and transparency in the utilization of the increased allocation, the federal government should establish a robust monitoring committee. This committee would oversee the execution of projects in each state, ensuring that funds are utilized efficiently and for the intended purposes. In this regard, the media has a crucial role to play by raising awareness about the augmented allocation and holding state governors accountable for their actions. By shining a light on the progress or lack thereof, the media can foster an environment of accountability and drive the implementation of impactful projects.

The expedited revitalization of state-owned refineries is of utmost importance. These refineries, if brought to optimum performance, will reduce our dependence on imported petroleum products and alleviate the strain on foreign exchange reserves. It is imperative that both the federal and state governments work collaboratively to fast track the refurbishment process, ensuring that these refineries become effective contributors to our economy. In order to support the growth of small-scale businesses, the government should provide low-interest loans. This financial assistance will enable entrepreneurs and budding enterprises to access the capital they need to expand their operations, create jobs, and contribute to economic growth. By nurturing these enterprises, we can harness the entrepreneurial spirit of our citizens and foster a vibrant and diverse business landscape.

Effective governance and proactive measures are crucial to steer Nigeria’s economy away from its current dire straits and towards a path of sustainable growth and prosperity for all. If our state governors wholeheartedly embrace these measures, the positive impact of fuel subsidy removal will be felt by the masses. Prompt implementation of a new minimum wage, robust infrastructure development, support for agriculture, accountability through monitoring committees, refinery revitalization, and financial assistance for small-scale businesses are all crucial steps towards unlocking the full potential of our economy.

Written by: Iranloye Sofiu Taiye (Optimism Mirror). A political/public affairs analyst, writer, public speaker and youth advocate. Can be reached via iranloye100@gmail.com

The post-fuel subsidy removal era in Nigeria was envisaged as a transformative phase and paradigm shift was anticipated. An era that will be characterized by shared prosperity among the masses and paving the way for national development. A departure from the previous era of favoritism towards oil moguls in the downstream and upstream sectors who enjoys the proceeds of the subsidy. However, contrary to expectations, this transition has plunged the nation into an unprecedented economic quandary, marked by escalating hunger and debilitating hyperinflation that have eroded the purchasing power of ordinary citizens. As a consequence, the trust of the populace in the policies of Tinubu’s administration has been rapidly eroded. It is worth noting that all three major contenders in the recent presidential election, including Atiku Abubakar and Peter Obi, endorsed the removal of fuel subsidies in their respective manifestos. Nevertheless, given the mounting dissent against the prevailing circumstances, urgent action is imperative to avert a potential mass demonstration reminiscent of the EndSARS protests.

It is evident that during President Muhammad Buhari’s administration, Nigeria has heavily relied on borrowing and foreign aid to finance its annual budget. A significant portion of these budgets is allocated to servicing debt, prompting the three major contenders in the recent presidential election to pledge the removal of fuel subsidies upon assuming office. Their rationale was to access funds for development, as the budgetary allocation for fuel subsidy alone could be utilized to build sustainable infrastructure across Nigeria. After the “Subsidy is gone” declaration by the President at Eagle Square during his inauguration speech in May, 2023, the withdrawal of fuel subsidies in Nigeria has ignited a myriad of contentious perspectives, particularly in light of the rampant hyperinflation of commodity and service prices, imposing severe economic hardships on the populace. Unlike the sudden shock of the COVID-19 pandemic, the elimination of fuel subsidies was a planned measure, designed to mitigate its adverse impact on the masses.

Removing fuel subsidies inevitably leads to a hike in the pump price of fuel, higher cost of living, as fuel prices often serve as a determining factor for commodity prices and the cost of public services. To cushion the above challenges, the federal government has implemented several initiatives, including injecting billions of naira into the agricultural sector, revitalizing dormant refineries, suspended conditional transfers, and releasing rice and other grains from national reserves to alleviate their market prices. Despite these efforts, the aftermath of this policy shift has proven to be regressive. The monthly allocation shared between the federal government, states, and local governments has increased by over 100% compared to the allocations received during the subsidy era. This augmented allocation represents the funds that were previously used to subsidize imported petroleum products, ensuring their affordability for the masses. These funds were expected to support the populace, mitigate the impact of subsidy removal in each state, bolster the agricultural sector, and address the infrastructural deficit plaguing Nigeria. Regrettably, over the past nine months, this substantial allocation has yielded little to no improvement in the welfare of the people, let alone witnessing any tangible infrastructural advancements. What exacerbates the situation is the silence of our governors, as if the federal government did not provide them with commensurate allocations to alleviate this foreseeable predicament. Could this be a case of sabotage?

Given that much of this crisis stems from panic buying and unregulated pricing practices across states, it is imperative to establish and empower an agency to control commodity prices. This would effectively curtail arbitrary and intentional price hikes imposed on consumers. Prompt implementation of a new minimum wage is imperative for both the public and private sectors. No state governor should be allowed to evade their responsibility of paying the new wage, especially considering the increased allocation they now receive. This measure ensures that the benefits of economic growth are shared by all, enhancing the well-being of workers across the nation. Moreover, it is high time each state government embarked on an ambitious infrastructure development plan, targeting every local government within their jurisdiction. By initiating construction projects, the state governments can stimulate economic activity and create employment opportunities at the grassroots level. These infrastructure endeavors will not only enhance connectivity but also lay the foundation for long-term growth and development in each locality.

Both the state and federal governments should prioritize the provision of improved seedlings, as well as robust security measures to safeguard farmers and their plantations. By subsidizing and ensuring the availability of high-quality seedlings, we can boost agricultural productivity and foster food security. Additionally, reinforcing security measures will protect farmers from the menace of banditry and other criminal activities, allowing them to cultivate their land without fear. To ensure accountability and transparency in the utilization of the increased allocation, the federal government should establish a robust monitoring committee. This committee would oversee the execution of projects in each state, ensuring that funds are utilized efficiently and for the intended purposes. In this regard, the media has a crucial role to play by raising awareness about the augmented allocation and holding state governors accountable for their actions. By shining a light on the progress or lack thereof, the media can foster an environment of accountability and drive the implementation of impactful projects.

The expedited revitalization of state-owned refineries is of utmost importance. These refineries, if brought to optimum performance, will reduce our dependence on imported petroleum products and alleviate the strain on foreign exchange reserves. It is imperative that both the federal and state governments work collaboratively to fast track the refurbishment process, ensuring that these refineries become effective contributors to our economy. In order to support the growth of small-scale businesses, the government should provide low-interest loans. This financial assistance will enable entrepreneurs and budding enterprises to access the capital they need to expand their operations, create jobs, and contribute to economic growth. By nurturing these enterprises, we can harness the entrepreneurial spirit of our citizens and foster a vibrant and diverse business landscape.

Effective governance and proactive measures are crucial to steer Nigeria’s economy away from its current dire straits and towards a path of sustainable growth and prosperity for all. If our state governors wholeheartedly embrace these measures, the positive impact of fuel subsidy removal will be felt by the masses. Prompt implementation of a new minimum wage, robust infrastructure development, support for agriculture, accountability through monitoring committees, refinery revitalization, and financial assistance for small-scale businesses are all crucial steps towards unlocking the full potential of our economy.

Written by: Iranloye Sofiu Taiye (Optimism Mirror). A political/public affairs analyst, writer, public speaker and youth advocate. Can be reached via iranloye100@gmail.comz