Nentawe Yilwatda, the national chairman of the All Progressives Congress, has warned that former Vice President Atiku Abubakar’s proposal to restore fuel subsidy could reverse recent gains in workers’ wages, education financing and state government finances.
Yilwatda said returning to the old subsidy regime could also revive fuel queues and recreate the fiscal pressures that characterised the previous arrangement.
The APC chairman spoke in Abuja while receiving a delegation of economic stakeholders who visited him to discuss Nigeria’s economy, ongoing reforms and prospects for sustainable growth.
He said the debate over subsidy should go beyond the immediate attraction of cheaper petrol and consider its implications for government revenues and spending on salaries, pensions, education, healthcare and infrastructure.
“Subsidy may appear attractive because it promises cheaper petrol, but Nigerians must also ask the bigger question: who pays for the subsidy and what happens to the resources that government must divert to finance it?
“A policy cannot be judged only by its immediate benefit at the pump. We must examine its impact on government revenues, salaries, pensions, education, healthcare, infrastructure and the overall capacity of government to meet its obligations to citizens,” he said.
Yilwatda said several state governments struggled to pay salaries before the subsidy was removed, with some resorting to partial payments.
He attributed the improved fiscal position of many states to increased federal allocations following the subsidy removal, saying the additional resources had enabled states to meet salary and pension obligations and undertake development projects.
He therefore urged those advocating a return to subsidy to explain how the policy would be funded without recreating the fiscal pressures of the past.
Read also: Africa’s $5 trillion invisible economy: Turning informality into prosperity
The APC chairman also linked the subsidy debate to the education sector, recalling prolonged disruptions to academic activities in Nigerian universities under the previous administration.
“A return to a fiscally unsustainable subsidy regime could have consequences far beyond the price of petrol. When government revenue is squeezed, the first victims are often the critical sectors that directly affect the welfare and future of our people,” he said.
Yilwatda said the sustainability of the new minimum wage should also be considered in discussions about subsidy.
He argued that higher wages require federal and state governments to have sufficient revenues to meet recurrent obligations without cutting spending on infrastructure, education and healthcare.
“The challenge is not merely to announce higher wages but to create an economic environment in which governments can consistently pay them without sacrificing investment in infrastructure, education, healthcare and other essential services,” he said.
He also highlighted the Nigeria Education Loan Fund (NELFUND), describing it as an important intervention that has expanded access to tertiary education financing and reduced the financial burden on families.
According to him, sustainable education financing is necessary to prevent students from abandoning tertiary education because of financial constraints.
Yilwatda also said the ongoing reforms were creating opportunities for Nigerians participating in the global digital economy.
He cited the increasing ability of Nigerians to use locally issued bank cards for legitimate transactions abroad and expanded digital payment options as examples of improvements in the financial system.
“Our young people are no longer limited by geographical boundaries. A Nigerian content creator, software developer, consultant or freelancer can provide services to clients anywhere in the world. But that opportunity requires a financial and payment system capable of supporting the global digital economy,” he said.
He urged caution against policies that could undermine progress in Nigeria’s financial and digital ecosystem.
Yilwatda acknowledged that subsidy removal had imposed hardship on Nigerians but argued that reversing the policy was not the solution.
“The hardship Nigerians have experienced is real, and government must continue to respond to it. But the answer cannot simply be to return to a system whose long-term fiscal implications created serious distortions in our economy.
“What Nigerians deserve is an economy that can sustainably finance good wages, quality education, healthcare, infrastructure and social protection without depending on an opaque and expensive subsidy system,” he said.
He called for a fact-based debate on subsidy and challenged political leaders proposing its restoration to explain the cost, funding mechanism and duration of the policy.
Read also: Nigeria’s finance bill is the annual fiscal habit that reform forgot to break
“Whenever anybody proposes a return to subsidy, Nigerians should ask: how much will it cost? Where will the money come from? What programmes will be sacrificed to finance it? And for how long can the government sustain it?
“These are legitimate questions that must be answered before the country embarks on another expensive policy experiment.”
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
