Opinion
Fuel Subsidy Removal: A Paradigm Shift for Nigeria’s Development
In a nation grappling with the persistent challenge of eliminating fuel-based subsidies, Nigeria stands at a crucial crossroads. Since the inception of fuel subsidies in 1970, successive governments have attempted to remove them, only to be met with stiff political complexities that have allowed the subsidy to persist for a long. However, the time has come for decisive action.
President Abimbola Ahmed Tinubu in his inaugural speech declared an end to fuel subsidy in an unambiguous word “It has gone for good”. To put an end to the government’s continuous subsidizing of fuel, will mark a significant domestic policy shift if it’s become successful. As the nation braces for the potential repercussions, citizens are faced with a critical question: Is Nigeria better off with or without fuel subsidies?
The debate surrounding fuel subsidies has always been fraught with controversies and conflicting interests. Critics argue that fuel subsidy has overstayed its usefulness, draining exorbitant amounts of money from governments’ lean purses year in, in, and year out-without significant impact on the lives of ordinary citizens it meant to benefit. Instead, these subsidies often end up benefiting individuals and independent marketers, exacerbating inequality and inflation in the process. Over the years, the removal of fuel subsidies has always sparked explosive situations and protests from Lagos to Kano, Benin to Abuja fueled by the elite, who manipulate the grievances of citizens to achieve their objectives.
Yet, the government argument or those in support has always asserted that by redirecting the funds saved from subsidies into education and health, the masses will benefit more directly. The promise of reinvestment in sectors that have a tangible impact on citizens’ lives holds the potential for transformative change. However, concerns remain about the immediate consequences of subsidy removal, especially for low-income earners who constitute the majority of the country’s populace and will bear the brunt of increased fuel prices and a subsequent rise in the cost of goods and services.
In my analysis, the removal of fuel subsidies presents both challenges and opportunities for the Nigerians and the Nigerian government in the short and long run. It is a complex domestic policy that requires careful consideration and effective implementation, if failed the masses will bear the brunt, if it becomes successful, the government bears the credit. However, with the right approach, it can lead to long-term benefits and positive outcomes for the country.
To effectively navigate this transition, the Tinubu lead government must address these fears head-on and build trust among the people. Firstly, the government must be proactive, swift, and effective in handling its interventions in the form of palliatives for the poorest of the poor that is necessary to cushion the effects of rising food prices and the overall cost of living that will accompany this major domestic policy shift or else it will sink the administration. Additionally, the government should consider temporary measures, such as opening the borders to flood the market with affordable food items, while also engaging transport associations and owners to prevent exorbitant fare hikes that would burden the citizens beyond their means.
Beyond these immediate actions, a comprehensive and sustainable approach is essential to prevent sinking citizens further into poverty, instead, the government should roll out measures targeted toward bringing significant portions of the population out of poverty and improving their overall well-being. This includes enhancing social welfare initiatives, improving public service delivery, investing in healthcare, providing adequate wages, and implementing unbiased empowerment programs. By focusing on these areas, the government can foster entrepreneurship that will further reduce the effect of fuel subsidy removal and create a more equitable society.
Furthermore, the government must prioritize transparency and accountability in the management of resources. It should ensure that the funds saved from fuel subsidy removal do not end up in the pocket of individuals but rather are channeled effectively into sectors that directly benefit the masses. To achieve this, a clear policy mechanism by civil societies organization and organizations like BudgIT should be empowered to track and monitor the utilization of these funds, preventing any mismanagement or misappropriation.
To successfully navigate this transition, effective communication, and public enlightenment campaigns are paramount. The rationale behind fuel subsidy removal and the long-term benefits must be communicated to the public, managing expectations and reducing resistance. Collaboration with civil society organizations, labor unions, and other stakeholders is crucial in developing comprehensive social safety nets to protect the most vulnerable from potential negative impacts.
In the same vein, as part of efforts to revitalize the nation’s oil and gas industry, the government should immediately consider outright concession or privatization of the dormant refineries. This would pave the way for improvements, efficiency, optimization, and commercialization by private investors, bringing these refineries back to life. This government cannot afford to embark on another futile round of Turn Around Maintenance, which has consumed trillions of dollars without yielding results under previous administrations. By doing so, with the addition of the nation’s four refineries with capacities of 600,000, 150,000, 125,000, and 110,000 barrels per day, along with the largest single train Dangote and BUA refineries, fuel would become more accessible and affordable.
However, before reaching that stage, the government must effectively manage the consequences of fuel subsidy removal and alleviate the multidimensional impacts it would have on the country’s limited resources, as it could prove to be a challenging task. If the subsidy is removed, it will inevitably lead to a significant increase in the prices of goods and services across the country, disproportionately affecting low-income earners in terms of transportation costs and quality of life, that’s it become expedient to flood the market with affordable food items by opening the border temporarily.
Similarly, the new government must not pay lip service to diversifying the economy, by promoting and supporting sectors such as agriculture, manufacturing, and technology, the government can create a more balanced and resilient economy. This will not only generate job opportunities but also reduce the vulnerability of the economy to fluctuations in oil prices, ultimately contributing to sustainable and inclusive growth. These are critical steps toward building a more resilient economy. This comprehensive approach will help lift a significant portion of the population out of poverty and improve their overall well-being.
One crucial lesson to be learned from past experiences is the importance of prioritizing social welfare initiatives. The government should draw inspiration from the Jakande administration, which focused on enhancing public service delivery in various sectors. Affordable and accessible housing options should be prioritized to address the housing needs of the less privileged, ensuring that they have a secure and dignified place to call home. Instead of constructing luxurious mansions in exclusive areas, the government should redirect its resources toward building affordable homes in areas where the poor can afford to reside.
Also, investments in the healthcare system are of paramount importance to provide quality and accessible healthcare services to all citizens, especially the underprivileged while adequate wages must be provided to workers across various sectors to ensure that they can afford a decent standard of living and support their families. Well-structured education is vital in equipping individuals with the necessary skills and knowledge for personal and professional growth, leading to improved socioeconomic conditions.
Lastly, effective regulation and oversight are necessary to ensure fair and accessible services for the citizens, particularly in sectors such as transportation. Monitoring mechanisms should be put in place to prevent exploitation and profiteering by private entities, ensuring that transport fares remain reasonable and affordable even without fuel subsidies. Investing in an efficient and affordable public transportation system will not only alleviate the financial burden on low-income earners but also contribute to decongesting the cities and reducing pollution.
In addition to these measures, transparency, and accountability in the management of resources are crucial to building trust and confidence among the citizens. The government must ensure that the funds saved from fuel subsidy removal are directed toward sectors that directly benefit the masses, such as education, healthcare, and infrastructure development.
In conclusion, the removal of fuel subsidies represents a paradigm shift in Nigeria’s development. By adopting a comprehensive and sustainable approach that prioritizes social welfare, economic diversification, transparency, and effective communication, the government can successfully navigate this transition. It is crucial to ensure that the benefits of economic growth reach all segments of the population, particularly the most vulnerable. With careful planning, implementation, and collaboration with stakeholders, Nigeria can forge a path toward a more equitable and prosperous future for its citizens.
Opinion
Almajiri: Why Northern Leaders Must Look Themselves in the Mirror
Two incidents happened during the 1994/95 NYSC service year, which I was part of in Birnin-Kebbi, Kebbi State, and they gave me profound culture shocks that I still remember till today. I would equally say that those incidents probably justified the Federal Government’s decision to float the scheme.
We were told that part of the reasons General Yakubu Gowon floated the NYSC was to ensure national integration, cohesion and exposure of young Nigerians to cultures of other parts of the country other than where they were born.
First was the shock of seeing a director that I was attached to in the then Government House, who had just taken a new wife, and sat among drivers, gate men and other junior staff to dine. I saw them seated round a huge iron pot of Koko, a local delicacy, exchanging one big spoon made of calabash, as each took turns to use the spoon to eat the delicacy. It was as if I was witnessing a scene where children of a big family were struggling to catch a portion of food or where people were eating Saara, as they say it in Yorubaland.
As I walked past the noisy crowd, I was transfixed seeing the newly-wedded director among the lot. He saw me standing still, as I couldn’t comprehend what he was doing there, and he got the message. ‘Taiyo, (as he used to call me) you won’t understand,’ he said as he waved to me to keep going. When we later saw, he explained that what he just did was a way of assuring the commoners that ‘we are all one,’ as they felicitated him on the new bride. But I could not fathom how the occupant of a ‘huge office’ as that of a director in a Government House , would sit among “commoners” on a tattered mat to share a single spoon and eat in public.
The other incident was quite pathetic. My friend, Tunde Omobuwa, was posted to a school in Yauri, in the southern part of the state, for his primary assignment. But he found the place boring on weekends. So, he arranged to always be with me on weekends.
One such weekend, we decided to take a stroll round the streets near the Government House. We took off from the place of my primary assignment, the Federal Information Centre; bought corn beside the office, and started ‘blowing’ the ‘mouth organ’ as we strolled. We were too engrossed in our gist and the sweetness of the corn to note that some young boys were trailing us, praying that some leftovers of the corn would drop for them to scavenge. Somehow, the two of us dropped the corn cob almost simultaneously. We were more than taken aback by a commotion that erupted at our back. Four eight or nine year-olds had descended on the supposed leftovers and broken the corn cobs into pieces. I was again transfixed as if one was hit by an electric shock. Remember that feeling when you play with electric fish?
I was moved to tears as I had never ever seen a group of children scavenging on nothing as it were. I beckoned to the kids and offered them N20, which was the highest denomination at the time, and with some smattering Hausa words told them to go buy their own corn from the same place we got ours. As they left, heading to the corn seller, I couldn’t erase that ugly sight from my mind. Was it really possible that some people scavenge on nothing this way? I was later to see incidents of children swarming around restaurants and pouncing on near empty plates.
These incidents told me clearly that the North was a different place and that the life of the boy child is not only risky and endangered but sold to stagnation and deprivation, unless you are one of the lucky few.
Having benefited from the free education policy of the Unity Party of Nigeria (UPN) between 1979 and 1983, when the Second Republic was terminated, I knew that there is a lot the government can do in educating the children. In my secondary school days, I was the Library Prefect at one point, and so I saw an excess of books supplied by the government to our school. So, I was an example of the feasibility of free education. It was the same way the Action Group government had handled education in the years preceding Nigeria’s independence and the First Republic.
So why can’t the state governments in the North declare free and compulsory education for the young ones out there? Why should children be made to scavenge on empty corn cobs just to see if they can find pieces of seeds left over?
And why was my director giving drivers and gate men in the Government House false hope that they were all the same, instead of him to challenge them to seek to lift themselves up the social ladder?
I think there was no excuse for the North not to have adopted a free education policy, just as Chief Obafemi Awolowo did in the South-West. And if we say the North needs to look itself in the mirror, you again remember the efforts by President Goodluck Jonathan to educate the multitude of Northern children through the Almajiri Schools. That government built more than 400 of such schools, which were abandoned because it could upset the oligarchy. The oligarchs forgot the truism that the children of the poor they refuse to train today won’t let their children sleep peacefully.
But the governor of Borno State, Prof Babagana Zulum, appears to have got the message. Last week, I was thrilled to see him organise a summit to reform the Almajiri system.
The Almajiri education system is a traditional Islamic method of learning widely obtained across states in northern Nigeria. Through that system, which is tied to Islamic teaching, youths, especially boys are kept out of the formal western education system. I don’t know why the teachings by Islamic scholars cannot go alongside that of Western education as it obtains in Saudi Arabia, Iran, Iraq and other Islamic countries that are doing well economically and in the world of science, technology.
While addressing the summit, Zulum had mentioned the need to address the root causes of insecurity through the provision of education for citizens of Borno, adding that improper teaching of Islamic studies has contributed to the emergence of Boko Haram insurgents in the state.
According to him, to curtail whatever is the adverse effect of Almajiri education; the Borno State Government has established the Arabic and Sangaya Education Board to introduce a unified curriculum for Sangaya and Islamic schools. He said that the reform would include establishing Higher Islamic Colleges to cater for Almajiri children and blending the religious teachings with the secular curricula as well as skills.
He said: “The Sangaya Reform is a great development. It will give Almajiri a better chance in life, particularly the introduction of integrating western education, vocational, numeracy, and literacy skills into the centres, which are also described as Almajiri and Islamic schools.
“Distinguished guests and esteemed educationists, government’s intention was to streamline the informal and formal education systems to quality integrated Sangaya School for admission into colleges and universities.”
One would have thought that governors with radical postures like Nasir el-Rufai and others before him would have proposed this type of reform, but it is better late than never. Zulum should be supported to get something out of this.
Opinion
Nigeria: Dancing On The Edge Of Destiny
Nigeria stands as a paradox, endowed with immense natural wealth yet grappling with staggering poverty levels among its populace. The country is blessed with an abundance of resources, including diverse agricultural products, vast oil reserves, and a burgeoning tourism and entertainment industry, all of which hold immense potential for national prosperity. Despite this richness, many Nigerians endure dire economic conditions, raising questions about the effective management and equitable distribution of wealth generated from these resources.
The agricultural sector in Nigeria is a significant contributor to both the economy and food security. With favourable climatic conditions and arable land, Nigeria has the potential to become an important player in global agriculture. However, inefficiencies in farming techniques, lack of access to modern equipment, inadequate infrastructure, and insecurity impede growth, leaving many farmers in subsistence conditions. By addressing these challenges, Nigeria could harness its agricultural wealth to reduce poverty and strengthen its economy.
Similarly, oil and gas remain at the forefront of Nigeria’s natural resources, providing a substantial share of government revenue. Unfortunately, the oil riches have also been a source of conflict and corruption, leading to environmental degradation and social unrest in oil-producing regions. Although the sector can foster economic growth, the mismanagement of resources has prevented the country from fully benefiting from its wealth. Furthermore, the fluctuating oil prices on the global market create vulnerability, emphasizing the need for economic diversification.
The entertainment industry, particularly Nollywood, represents another facet of Nigeria’s wealth. This sector showcases rich cultural heritage, offers employment opportunities, and generates income. Despite its success, it has not yet been leveraged to bring about far-reaching economic change across the country. Without addressing existing systemic challenges, Nigeria’s abundant resources might continue to dance precariously on the edge of opportunity, further complicating the narrative of its natural wealth.
Leadership Challenges and Political Corruption
Significant leadership issues and pervasive political corruption have plagued Nigeria’s history. Since gaining independence in 1960, the nation has witnessed a succession of leaders, many of whom have failed to prioritize the welfare of their citizens. Ineffective governance has not only hampered Nigeria’s growth but has also led to a persistent cycle of political instability. This crisis of leadership has contributed significantly to the erosion of public trust in governmental institutions, weakening the social fabric of the country.
The impact of political corruption is deeply entrenched in Nigeria’s socio-economic landscape. Corruption permeates various layers of governance, leading to the misallocation of resources intended for public welfare. Essential services such as healthcare, education, and infrastructure development suffer as funds are diverted for personal gain. The consequences of such malfeasance are evident in the rise of poverty rates, inadequate healthcare systems, and a significant lack of access to quality education. Consequently, these socio-economic challenges create a vicious cycle that further exacerbates the leadership crisis.
Historically, Nigeria has experienced a range of leadership styles, from military rule to civilian governments, yet the recurring theme remains the same: a failure to eradicate corrupt practices. Each new leadership regime often promises reform and better governance, but these assurances rarely translate into meaningful change. The lessons from past experiences underscore the importance of accountability and transparency in rebuilding trust between the government and the populace. As the nation grapples with its leadership crisis, the intersection of governance and corruption demands critical attention to chart a new course towards sustainable development and empowerment.
The Hardships Under the Current Administration
The current administration of Nigeria, under President Bola Tinubu, has ushered in an array of policies that have sparked significant public discourse due to their profound impact on the lives of ordinary Nigerians. Notably, the removal of fuel subsidies has been a pivotal move that has reverberated through the economy, leading to steep increases in fuel prices. This sudden change has not only made transportation costs soar but has also led to a ripple effect, dramatically affecting the prices of basic goods and services. Citizens are now grappling with the daily realities of inflated living costs, often on already strained budgets.
Furthermore, the naira floating, aimed at addressing exchange rate discrepancies, has instead resulted in further devaluation. The naira’s instability has posed challenges for local businesses and individual consumers, making it increasingly difficult to afford essential products. This monetary policy highlights the delicate balancing act required in governance, reflecting the complexity of addressing economic issues while ensuring the welfare of the populace. Many Nigerians report feelings of uncertainty and anxiety regarding their financial futures, emphasizing a general sentiment of disillusionment with the direction of government policy under the Tinubu administration.
A Path Forward: Hope or Despair?
Nigeria’s current circumstances present a dichotomy of hope and despair. Despite the numerous challenges confronting the country, including political instability, economic hardships, and social unrest, there is a glimmer of hope that reform is possible through concerted efforts by the populace and leadership. As the country reaches a crossroads, systemic reforms have the potential to catalyze change. These reforms must prioritize institutional strengthening, increase transparency, and promote inclusive and sustainable economic growth.
Public participation is critical in this endeavour. Citizens must reclaim their agency by actively participating in democratic processes, advocating for accountability from their leaders, and demanding that their voices be heard. Civic education should be promoted to ensure that the electorate is informed and empowered to make decisions that affect their future. Furthermore, civil society organizations can play a pivotal role in mobilizing resources and providing platforms for dialogue, where citizens can articulate their needs and aspirations.
Accountability from leadership is another cornerstone for progress in Nigeria. As the people seek a path forward, leaders must prioritize the needs of their constituents over personal interests. Regular assessments of governmental performance, transparency in budgeting and spending, and anti-corruption measures can help to restore public trust. Leaders who demonstrate commitment to these principles may inspire hope and foster collective action aimed at the common good.
Ultimately, the question remains: Who holds the key to Nigeria’s promised future? The answer lies within the collaboration between the government and its citizens, whereby both parties work towards common objectives. The road to prosperity for Nigeria is not easy, but through systemic reforms, public engagement, and accountability, there exists an opportunity to transform hope into reality, steering the nation towards a brighter tomorrow.
Mimiola, an Award-Winning journalist, sent in this piece.
Opinion
NNPCL vs. Dangote: Why Tinubu Can’t Play Pontius Pilate
The Presidency addressed several issues last Wednesday as the Special Adviser to President Bola Ahmed Tinubu on Information and Strategy, Mr. Bayo Onanuga picked the microphone to give perspectives to certain developments. One of the issues he addressed was the lingering feud between the Nigerian National Petroleum Corporation Limited (NNPCL) and Dangote Refineries Limited.
Onanuga said that President Tinubu would not intervene in the feud because the two entities “operate independently in a deregulated market.”
According to Onanuga, the Premium Motor Spirit (PMS) field has been deregulated, just as Dangote is a private company. The NNPCL is a limited liability company, he said. In the loaded statement, the presidential adviser was hinting Nigerians why the President cannot dabble into the huge but confusing feud between Dangote Refineries and NNPCL, over the pricing of petroleum products in the country.
The presidential adviser and Nigerians are not oblivious to the implications of his statement. First, a lot of hope had been invested in the Dangote Refineries by Nigerians, who had concluded that its coming on stream would yield them cheaper fuel and help end the perennial fuel scarcity that kept the pumps at the filling stations dry for most of the months. But as the refinery was about to fag off its full operations, officials of the refinery, the NNPC and its subsidiaries started singing some music with disparaging tunes. Accusations upon accusations were rampaging in the air, while some name calling and tagging were being spread openly and under the table. It became obvious that elements in the administration of President Tinubu were opposed to the operation of the local refinery. Such insinuations must have prompted the President of Dangote Group, Alhaji Aliko Dangote to speak out in some tones not easily attributable to him hitherto. He alleged that officials of the NNPC were running a blending plant in Malta, where fuel is imported into Nigeria. He equally offered to hand off the Lagos-based refinery if the government would buy him out.
As tension rose, between Dangote and NNPCL, the corporation was having the last laugh, as it chose the same time to unleash some violent strokes of koboko whips on the back of the Nigerian citizen. It galloped fuel prices at will and at the same time locked the products away from their reach. Queues got unwinding at filling stations and the agony was unending. The hunger and thirst for Dangote fuel grew, but the NNPC chose to remain the stumbling block. I guess that the cries of Nigerian citizens at one point got across the Aso Rock Villa, in Abuja and the presidency had to order a temporary ceasefire. NNPCL was directed to create avenues for the supply of crude oil to Dangote in Naira while the refinery too was to agree to a pricing model to be fashioned by the Federal Executive Council. Even at that, the two combatants have continued to throw jabs at each other, especially over what should constitute the exact price of Dangote petrol. While Dangote had claimed that fuel from its refineries would be far cheaper than imported ones, the NNPC had given a conflicting indication. The NNPC/Dangote tango has been a ding-dong and a topsy-turvy affair.
That was the situation as the October 1 date fixed for the start of crude supply to Dangote draws close. And Mr. Onanuga was speaking against that backdrop. If that stands, it would amount to classifying Tinubu in the mould of the biblical Pontius Pilate, as seen in the book of John 18:37-49 and 19:1-19. In that biblical encounter, leading to the final crucifixion of Jesus Christ, the Jews had brought Jesus to Pilate’s court for an indictment that would enable them to crucify him. Pilate asked questions of Jesus and even though Jesus answered in the spirit, the judge was still able to conclude that he found no fault in Jesus. And that was despite the mounting pressure from the multitude of Jews, seeking to crucify Jesus.
As we read in John 19:6; “When the chief priests therefore and officers saw him, they cried out, saying, Crucify him, Crucify him. Pilate saith unto them, Take ye him, and crucify him: for I find no fault in him.”
I believe that President Tinubu should not throw Nigerians at the NNPC, like sheep to wolves. If the declaration of his office is allowed to stand, he would be doing otherwise. To play the Pilate in this needless NNPCL and Dangote feud, he would have endorsed all the punishment his compatriots are suffering at the hands of the NNPCL. He would have said, even though I found no merit in the push to whip the population, I leave you to crucify them’ That would tell us that the President is not only shirking his responsibility as the Minister of Petroleum but also his overriding power as the President and Commander-in-chief.
Much as the officials of the NNPCL and other subsidiaries owned by the Nigerian people want to play the master by believing that they are independent limited liability companies, we will be hiding behind one finger if we believe any inch of that claim. And besides, which limited liability company would not be accountable to its shareholders or the chairman of its board?
If we don’t want to use agidi to light a gas cylinder, we have to agree that the matter of fuel supply in Nigeria is a basic unmistakable assignment President Tinubu must handle for his employers-the Nigerian people. He must be in a position to find answers to the puzzles. Why is fuel supply such a pain in the neck under his administration so far? Why is the locally imported fuel threatening to get more expensive under the watch of the NNPC he supervises? And why is the same NNPC seeking to suffer headaches for another person? When will NNPC’s refineries come alive after the several deadlines?
President Tinubu needs to intervene decisively too, by helping his employers find solutions to the endless hike in fuel prices, and why citizens of other oil-producing countries derive benefits from oil while the Nigerian situation is perpetually in the negative. The Daily Trust on September 23, published a report by Global Petrol Prices, a platform that tracks petrol prices across various countries, which claimed that four countries in Africa sell fuel cheaper than Nigeria. They include Libya which sells at $0.032 (approximately N52/litre), Egypt ($0.279), Algeria($0.342) and Angola, another oil-producing country, at $0.351 per litre.
Besides the above, Tribune columnist and renowned writer, Professor Farook Kperogi quoted data by some oil industry experts who claimed that the landing cost of imported petrol in Nigeria should stand at N1,107 per litre and that several cost components are not inclusive of locally imported fuel.
According to him, when such cost components are removed, Dangote’s fuel should not sell higher than N518.35 per litre. Indeed, investigations have revealed that Dangote fuel costs far cheaper than the amount quoted by him and the NNPC. You could see the fire in the eyes of the spokesperson of Dangote when he refuted the claim that NNPC got fuel at N890 per litre from the refinery.
President Tinubu should not play the ostrich, he cannot afford to play the Pontius Pilate in this case, if he wants a reversal of the oil curse in his tenure.
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