The National Chairman of the All Progressives Congress (APC), Prof. Nentawe Yilwatda, has warned that former Vice President Atiku Abubakar’s proposal to restore fuel subsidy could undermine the economic gains recorded under the current reforms and worsen the country’s fiscal challenges. Yilwatda said a return to the old subsidy regime could have far-reaching implications for […]
The National Chairman of the All Progressives Congress (APC), Prof. Nentawe Yilwatda, has warned that former Vice President Atiku Abubakar’s proposal to restore fuel subsidy could undermine the economic gains recorded under the current reforms and worsen the country’s fiscal challenges.
Yilwatda said a return to the old subsidy regime could have far-reaching implications for workers’ salaries, education, healthcare, infrastructure and the financial capacity of state governments.
The APC chairman stated this on Sunday while receiving a delegation of economic stakeholders in Abuja, according to a statement issued by his Special Adviser on Media and Information Strategy, Abimbola Tooki.
Atiku, who is the presidential candidate of the African Democratic Congress (ADC) for the 2027 election, recently pledged to restore fuel subsidy if elected, arguing that the policy would help cushion the impact of subsidy removal on Nigerians.
The former vice president’s position has since generated mixed reactions, particularly because he had pledged during the 2023 election campaign to end fuel subsidy if elected.
President Bola Tinubu, on May 29, 2023, declared during his inauguration that “fuel subsidy is gone,” triggering a sharp increase in petrol prices and subsequent rises in the cost of goods and services.
The APC-led Federal Government has, however, consistently defended the policy, arguing that the removal has improved government revenues and strengthened the finances of federal and state governments.
Reacting to Atiku’s proposal, Yilwatda said the subsidy debate should go beyond the immediate attraction of cheaper petrol and focus on how the policy would be financed and sustained.
“The former Vice President, Atiku Abubakar’s proposal to restore fuel subsidy raises fundamental questions about how such a policy would be financed and sustained without returning Nigeria to the cycle of fiscal pressures that characterised the previous arrangement,” he said.
According to him, while subsidy could make petrol cheaper at the point of purchase, its broader implications for government revenues and spending must be considered.
“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 recalled that several state governments previously struggled to pay workers’ salaries and pensions, with some resorting to partial payments.
He argued that increased federal allocations following the removal of fuel subsidy had improved the financial position of many states, warning against policies that could return them to previous fiscal difficulties.
The APC chairman also raised concerns about the potential impact of subsidy restoration on education, recalling the prolonged disruption of academic activities in Nigerian universities under the previous administration.
He warned that reduced government revenues could affect the funding of critical public services.
“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,” Yilwatda said.
On workers’ salaries, he said the sustainability of the new minimum wage should form part of the subsidy debate, stressing that governments must have sufficient resources to meet their recurrent obligations.
He cautioned that improved wages should not come at the expense of funding infrastructure, education, healthcare and other essential services.
Yilwatda also highlighted what he described as improvements in Nigeria’s digital payment ecosystem under the ongoing reforms, saying the development had expanded opportunities for young Nigerians, freelancers, software developers and content creators to receive international payments.
“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 developments in Nigeria’s financial and digital ecosystem.
The APC chairman further described the Nigeria Education Loan Fund (NELFUND) as an important intervention that had expanded access to tertiary education financing and reduced the immediate financial burden on families.
He stressed that sustainable funding for education remained necessary to prevent young Nigerians from abandoning their studies because of financial constraints.
Yilwatda acknowledged the hardship Nigerians have experienced since the removal of fuel subsidy, saying the government must continue to introduce measures to cushion the effects on vulnerable citizens.
However, he maintained that restoring subsidy was not a sustainable solution to the economic challenges facing the country.
“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,” he said.
He argued that Nigerians deserved an economy capable of sustainably financing good wages, quality education, healthcare, infrastructure and social protection without relying on what he described as an opaque and expensive subsidy system.
He therefore challenged proponents of subsidy restoration to explain how the policy would be funded and sustained.
“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?” Yilwatda asked.
“These are legitimate questions that must be answered before the country embarks on another expensive policy experiment.”
