National Issues
Fuel Subsidy: Realities that matter will not change
Eliminating fuel and electricity-based subsidies have been one of the greatest challenges confronting every successive governments since 2000 when the Olusegun Obasanjo – led administration first attempted it. Fuel subsidy was introduced in 1970 to ensure Nigerians buy petroleum products at optimal prices below the international market price.
Like every government, this present administration has attempted to remove fuel subsidies right from when it came on board, however, due to politics that often surrounds its removal, to this day it has remained with us. However, this time it seems the Buhari government has weighed the available options before her and decided to part away with the subsidies. The government has announced that from February 2022, it is ready to throw the bathwater of the ‘abiku’ call subsidy away without throwing the child along with it. What this means is that Nigerians will have to either pay N340 per liter before they can access a liter of petrol or troop out in their masses to stage another protest at Ojota once again to resist any form of attempt to remove the little sugar in their mouth.
Fuel, unlike electricity where Nigerians often pay for light in exchange for darkness, its subsidy has been the only government intervention that the poor citizens had benefited from the largesse of national cake, and that’s why anytime the government tries to do away with fuel subsidy, It always sparked an explosive situation that flares up brick-wall of protest by the citizens who have had a taste of the spoils of the dividends of democracy that came their way since 1970.
In 2014, when former President Goodluck Johnathan attempted to remove fuel subsidies which he said cost the government billions of naira monthly as of then it was thawed with stiffer opposition by the then opposition party, trade union, and the activists. But beyond this glaring issue is a government that couldn’t provide the necessities of life such as clean water, light, affordable healthcare facilities, decent intra commuters means of transportation, affordable housing, security, and a cheap and affordable food supply chain. This highlighted in part why people are often quick to stage protests, the other part is the economy that has deteriorated to the point that people couldn’t afford everything that adds up to life, especially the most basic need of life: food and shelter. In the last six years or so the prices of foodstuff have skyrocketed to the point that bread, rice, egg, among others have turned to luxuryy on the table only eating occasionally, all thanks to the government’s uncircumcised economic policy that has further driven common people below the accepted poverty line.
More so, beyond this pervasive disillusionment is something far disturbing which has completely alter the metabolism of the people: the years of bullying, bruising, and battering of the people by government unfriendly policy has created a fearful apprehension which the politicians often exploit to the full during the election. Thus, the people had lost the ability to trust the government; that’s why each time a good decision is being taken on behalf of the people, it often thwart with a brimmed wall of opposition. Should we blame the citizens? Hell no, for years of government bullying has make life unpleasant for the masses.
If my brain will not betray me, this departure from the current pump price of N162 is more than a 100% increase of the new pump price. Many have justified this new price change that it reflect the average price of gasoline across different countries of the world but fail to consider the stringent conditions of living here compared to those countries they often compared us with. The populace be it citizens or immigrants, often benefited from wages far above ours, stronger price purchasing parity, life and disaster insurance policy, per capita income, quality education, affordable housing, healthcare facilities, the standard of living, and social welfare that allow them to have a good quality of life. And also, the argument that the rich benefited more from the fuel subsidy doesn’t add up. Yes, in their evil strategy to make more money, sometimes, a certain percentage of the fuel volume imported into the country is often smuggled across the borders for sales. This is because our neighbors beat Nigeria on cost rivals yet Nigeria pays the fools price on non-existing fuel. In any case, is this enough reason to remove fuel subsidies? Why can’t the government clean up the corruption? Why should the poor citizens always be the ones at the receiving ends of the government inefficiency? Why should the citizens be punished while the political class continues to live in denial of the existence of the crisis we are currently in, yet earned bogus and underserved salaries and live an opulent lifestyle.
Meanwhile, to cushion the effect of fuel subsidy removal, the government has announced its plans to pay N5,000 to 40 million from the bulk of the country’s poorest of the poor. To me, this is a lazy man’s approach and it seems we are moving in a vicious circle that will lead us nowhere. First, the options before us are not fit for our situation given our propensity to corruption, no doubt, only a little fraction of the money will reach the targeted group. As history doesn’t lie, the two hundred billion this money amounted to rather than reaching the poorest of the poor, will end up in the pocket of the elite subcontracted for the job. History, as we have seen, is littered with examples of this kind of intervention that failed. We all know what happened to covid-19 palliatives. It’s very unsustainable and bound to fail even before starting. More so, as we have seen, dispersing money in the name of social intervention doesn’t guarantee that it will end up in the hands of those it targeted. Is it not better to invest it in something that will outlive this government?
Besides, there are several issues that one would have expected this government to tackle before embarking on fuel subsidy removal; which is not outrightly bad given the situation at hand but the first thing one would have expected the government to do is to privatize all the moribund refineries to make way for an improvement, efficiency, optimization, and commercialization.
Interestingly , this country has four refineries, the first refinery bult in Port Harcourt has a capacity of 60, 000 barrels per day while the other one still in Port Harcourt has a capacity of 150, 000 barrels per day, the Warri Refinery has a capacity of 125, 000 barrels per day, and the Kaduna Refinery has a capacity of 110, 000 barrels per day making the nation’s total refining capacity amount to 445, 000 barrels per day if they are operated at ideal capacity but today, all the four refineries are in comatose despite the billions this government has spent on turnaround maintenance.
Moreover, one would have thought the government would prioritize privatizing these moribund refineries to increase their capacity optimally to fill the gap created by the lack of having a functioning one to remove the multi-dimensional upshots of fuel subsidy on the country’s lean resources. Sometimes I wonder about the kind of discussion taking place in the national executive meetings where policy and actions of government are often debated to make an informed conclusion.
Similarly, the other option becomes clear that the second option would have been that the government partner with the state government to establish a decent fleet of comfortable and safe means of intra carrier across the country for all Nigerians instead of paying subsidies that will reach a few people or certain parts of the country than the other. One, It will save the country more money and at the same time provide employment opportunities to the teeming population. Secondly, it would allow the government to dis-congested our much populated and polluted cities when we all put our cars on the road day and night. Meanwhile, if the government invests in an efficient and affordable public transportation system, It will relieve the poor from the impact of high transportation in commuting from one part of the country to another, and within cities.
If the subsidy is removed, it means one thing, the price of goods and service in the market across the country would skyrocket by the new price of petroleum, the burden will squarely be on the low-income earners in terms of transportation cost and quality of life. Therefore what the poor need at this time program that will ease that burdens of the high cost of transportation that would come along with the new price regime given that our transportation industry is still fossilized with fossil fuel and not miserable 5000 naira.
Finally, without any attempt to water down the infrastructural achievement of this government, one would have expected this government to conclude its train revolution across the country to ease the burden of transportation costs on the low-income earners. Investing in infrastructures such as good roads, affordable health care facilities, housing units for the poorest of the poor without having to pay through their nose, then If the government take away the fuel subsidy, no one would blinked an eyelid, but without any of these things in place that would make life easy for the citizen given the current harsh economic realitiess where in there more people have been push below the poverty line than in 2015 when this government came on board , giving cash to poor people instead of creating an economy that would create things that create wealth and make their purchasing price parity to be stronger,that would amount to wastage of resources.
In my honest view, what I consider to be an effective form of intervention to cushion the effect of subsidy by a government that cares to improve the social welfare of its citizens is improves in the public service delivery like social welfare directed to the poorest of the poor without the middlemen such as the provision of the affordable health care system, wages, well structure education and empowerment without any political leanings, this will remove a certain proportion of citizens from poverty and diseases and not the sharing of trader moni, market moni that will end up in the pocket of the elite. To me, that’s what it means to cushion the impact of fuel subsidy if at all we all decide to let it go and not one miserable N5,000 that can’t cook a pot of soup. And to me, that’s like scratching the corn at the back of a basing and what the yorubas would call ‘ai ni kan se’.
Adediji Wasiu, sent this piece from Lagos State, Nigeria
TEXT OF THE BROADCAST BY PRESIDENT BOLA AHMED TINUBU, COMMANDER-IN-CHIEF OF THE ARMED FORCES, DECLARING STATE OF EMERGENCY IN RIVERS STATE ON TUESDAY 18 MARCH 2025
Fellow Nigerians, I feel greatly disturbed at the turn we have come to regarding the political crisis in Rivers State. Like many of you, I have watched with concern the development with the hope that the parties involved would allow good sense to prevail at the soonest, but all that hope burned out without any solution to the crisis.
With the crisis persisting, there is no way democratic governance, which we have all fought and worked for over the years, can thrive in a way that will redound to the benefit of the good people of the state. The state has been at a standstill since the crisis started, with the good people of the state not being able to have access to the dividends of democracy.
Also, it is public knowledge that the Governor of Rivers State for unjustifiable reasons, demolished the House of Assembly of the state as far back as 13th December 2023 and has, up until now, fourteen (14) months after, not rebuilt same. I have made personal interventions between the contending parties for a peaceful resolution of the crisis, but my efforts have been largely ignored by the parties to the crisis. I am also aware that many well-meaning Nigerians, Leaders of thought and Patriotic groups have also intervened at various times with the best of intentions to resolve the matter, but all their efforts were also to no avail. Still, I thank them.
On February 28, 2025, the supreme court, in a judgment in respect of about eight consolidated appeals concerning the political crisis in Rivers State, based on several grave unconstitutional acts and disregard of rule of law that have been committed by the Governor of Rivers State as shown by the evidence before it pronounced in very clear terms:
“a government cannot be said to exist without one of the three arms that make up the government of a state under the 1999 Constitution as amended. In this case the head of the executive arm of the government has chosen to collapse the legislature to enable him to govern without the legislature as a despot. As it is there is no government in Rivers State.”
The above pronouncement came after a catalogue of judicial findings of constitutional breaches against the Governor Siminalayi Fubara.
Going Forward in their judgment, and having found and held that 27 members of the House who had allegedly defected
“are still valid members of Rivers State House of Assembly and cannot be prevented from participating in the proceedings of that House by the 8th Respondent (that is, the Governor) in cohorts with four members”
The Supreme Court then made some orders to restore the state to immediate constitutional democracy. These orders include the immediate passing of an Appropriation Bill by the Rivers State House of Assembly which up till now has not been facilitated.
Some militants had threatened fire and brimstone against their perceived enemy of the governor who has up till now NOT disowned them.
Apart from that both the House and the governor have not been able to work together.
Both of them do not realise that they are in office to work together for the peace and good governance of the state.
The latest security reports made available to me show that between yesterday and today there have been disturbing incidents of vandalization of pipelines by some militant without the governor taking any action to curtail them. I have, of course given stern order to the security agencies to ensure safety of lives of the good people of Rivers State and the oil pipelines.
With all these and many more, no good and responsible President will standby and allow the grave situation to continue without taking remedial steps prescribed by the Constitution to address the situation in the state, which no doubt requires extraordinary measures to restore good governance, peace, order and security.
In the circumstance, having soberly reflected on and evaluated the political situation in Rivers State and the Governor and Deputy Governor of Rivers State having failed to make a request to me as President to issue this proclamation as required by section 305(5) of the 1999 Constitution as amended, it has become inevitably compelling for me to invoke the provision of section 305 of the Constitution of the Federal Republic of Nigeria, 1999 as amended, to declare a state of emergency in Rivers State with effect from today, 18th March, 2025 and I so do.
By this declaration, the Governor of Rivers State, Mr Siminalayi Fubara, his deputy, Mrs Ngozi Odu and all elected members of the House of Assembly of Rivers State are hereby suspended for an initial period of six months.
In the meantime, I hereby nominate Vice Admiral Ibokette Ibas (Rtd) as Administrator to take charge of the affairs of the state in the interest of the good people of Rivers State. For the avoidance of doubt, this declaration does not affect the judicial arm of Rivers State, which shall continue to function in accordance with their constitutional mandate.
The Administrator will not make any new laws. He will, however, be free to formulate regulations as may be found necessary to do his job, but such regulations will need to be considered and approved by the Federal Executive Council and promulgated by the President for the state.
This declaration has been published in the Federal Gazette, a copy of which has been forwarded to the National Assembly in accordance with the Constitution. It is my fervent hope that this inevitable intervention will help to restore peace and order in Rivers State by awakening all the contenders to the constitutional imperatives binding on all political players in Rivers State in particular and Nigeria as a whole.
Long live a united, peaceful, secure and democratic Rivers State in particular and the Federal Republic of Nigeria as a whole.
The Department of State Services (DSS) has emphasized the need for the recruitment of intelligent graduates into its ranks, stating that crime-fighting requires intellect and strategic thinking.
DSS Director, Oluwatosin Ajayi, made this known on Wednesday while delivering a lecture at the University of Ilorin, Kwara State.
The lecture, titled “The Roles of the DSS in Security, Peacekeeping, and National Integration,” highlighted the agency’s crucial role in safeguarding the nation and the necessity of strengthening intelligence institutions.
Ajayi, represented by DSS Deputy Director Patrick Ikenweiwe, stressed that the country’s best minds should be drafted into the DSS to address the growing security challenges.
“If I have my way, the best graduates in the country should be compelled to join the DSS and serve the nation in tackling security threats,” Ikenweiwe stated.
Drawing a comparison to Israel’s academic system, he noted: “In Israel, students who score above 70 marks in their university entrance exam are automatically placed in the university. Tell me, how would a ‘Dundee’ (dullard) be able to counter a criminal gang made up of first-class brains? Intelligence is key to fighting crime.”
He further advocated for collaboration with academic institutions to identify top-performing students who could be recruited into the intelligence service.
The DSS official also outlined several threats to national security, including sabotage, subversion, and espionage, urging a comprehensive approach to national security that includes intelligence-driven solutions and a well-trained workforce.
The Nigerian government spent a staggering $3.58 billion on servicing foreign debt within the first nine months of 2024, marking a significant 39.77% increase compared to the $2.56 billion expended over the same period in 2023.
This data, drawn from a recent report on international payment statistics by the Central Bank of Nigeria (CBN), reflects a concerning rise in the country’s foreign debt obligations amid depreciating currency values.
According to the report, the most substantial monthly debt servicing payment occurred in May 2024, totaling $854.37 million. This is a substantial 286.52% increase from May 2023’s $221.05 million.
Meanwhile, the highest monthly payment for 2023 was $641.7 million in July, underscoring the trend of Nigeria’s escalating debt costs.
Detailed analysis of monthly payments further illuminates the trend.
In January 2024, debt servicing costs surged by 398.89%, reaching $560.52 million, a significant rise from $112.35 million in January 2023. However, February saw a modest reduction of 1.84%, with costs decreasing from $288.54 million in 2023 to $283.22 million in 2024. March also recorded a decline of 31.04%, down to $276.17 million from $400.47 million the previous year.
Additional fluctuations in debt payments continued throughout the year, with June witnessing a slight decrease of 6.51% to $50.82 million from $54.36 million in 2023. July 2024 payments dropped by 15.48%, while August showed a 9.69% decline compared to 2023. September, however, reversed the trend with a 17.49% increase, highlighting persistent pressure on foreign debt obligations.
With the rise in exchange rates exacerbating these financial strains, Nigeria’s foreign debt servicing costs are projected to remain elevated.
The central bank’s data highlights how these obligations are stretching national resources as the naira’s devaluation continues to impact debt repayment in dollar terms.
Rising State Debt Levels Add Pressure
The federal government’s debt challenges are mirrored by state governments, whose collective debt rose to N11.47 trillion by June 30, 2024.
Despite allocations from the Federal Accounts Allocation Committee (FAAC) and internally generated revenue (IGR), states remain heavily reliant on federal transfers to meet budgetary demands.
According to the Debt Management Office (DMO), the debt burden for Nigeria’s 36 states and the Federal Capital Territory (FCT) rose by 14.57% from N10.01 trillion in December 2023.
In naira terms, debt rose by 73.46%, from N4.15 trillion to N7.2 trillion, primarily due to the naira’s depreciation from N899.39 to N1,470.19 per dollar within six months. External debt for states and the FCT also increased from $4.61 billion to $4.89 billion during this period.
Further data from BudgIT’s 2024 State of States report illustrates how reliant states are on federal support. The report revealed that 32 states depended on FAAC allocations for at least 55% of their revenue in 2023.
In fact, 14 states relied on FAAC for 70% or more of their revenue. This heavy dependence on federal transfers underscores the vulnerability of states to fluctuations in federal revenue, particularly those tied to oil prices.
The economic challenges facing both the federal and state governments are stark. The combination of mounting foreign debt, fluctuating exchange rates, and high reliance on federally distributed revenue suggests a need for fiscal reforms to bolster revenue generation and reduce vulnerability to external shocks.
With foreign debt obligations continuing to grow, the report emphasizes the urgency for Nigeria to address its debt sustainability to foster long-term economic stability.
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