When President Tinubu announced the removal of subsidy in his inaugural speech on May 29 2023, it was a decision taken without the benefit of a cabinet to discuss and provide necessary inputs.
The National Assembly, which is constitutionally mandated to make laws on issues of critical national importance such as the subsidy removal through its legislative processes, had not even been inaugurated.
President Tinubu, who was elected a few months earlier by the people of Nigeria, did not see the need to consult with the sectoral representatives of the Nigerian people on this decision.
In 1986, when then military president Ibrahim Babangida decided to implement the Structural Adjustment Programme SAP which included in the package, withdrawal of subsidies, he at least consulted widely across the board with sectors of the Nigerian people. Although he eventually decided to implement the programme, he at least took the people into confidence. And out of the consultations he came away with recommendations to implement institutional measures that helped to cushion the effects of the programme on the people. Measures like the Department of Food, Roads and Rural Infrastructure DFFRI, National Directorate of Employment etc.
Babangida’s template became the standard for subsequent implementation of similar programmes down the years. From General Sani Abacha who succeeded Babangida, there was the Petroleum Trust Fund PTF which implemented social and economic infrastructure programmes right across the spectrum of national life. Presidents Obasanjo, Jonathan and Buhari came with programmes too. cushion the effects of the withdrawal of subsidies they variously implemented.
President Tinubu is on record as being the only president in Nigeria since the advent of Structural Adjustment Programmes under military president Babangida not to have discussed with the people of the country before implementing the subsidy withdrawal.
This can only mean that President Tinubu never intended to take the people into account and thus never felt the need to implement any comprehensive cushioning programmes that could ameliorate such a fundamental economic restructuring on the Nigerian people. Indeed from his antecedents as Lagos Governor, president Tinubu’s favourite economic model is implementing measures and policies that will result in raising revenues to fund his fancies than anything else. It has not always been his consideration to take on the task and responsibility of implementing an all-inclusive economic model of development for Nigeria. As in Lagos, while he was governor, president Tinubu implemented a comprehensive tax policy that squeezed revenue out of every economic activity not necessarily for the purpose of transformational economic development, but more for making revenues available for Tinubu to implement his pet political and economic agenda.
As president of Nigeria with sovereign powers President Tinubu has not only withdrawn subsidies, he has proceeded to impose taxes on Nigerians and taking on humongous loans that defy economic reasoning. If President Tinubu’s fiscal policies had development intent and content it would not have been introduced in the sleight-of-hand manner it was done by the president alone; it would have engaged and included the inputs of sectors of the economy that will be affected by the policy.
Three years on the weaknesses of the subsidy removal implemented by President Tinubu has been laid bare; 140 million Nigerians pushed out of the relative safety of Nigeria’s economic net; the contraction of economic activities as a result of the heavy burdens placed on Nigerians who have to cope with ever rising costs in transportation, food, services and everyday life.
The explanation given by the president’s economic advisers is not convincing as it hardly addresses the fundamentals. The government says more money which had been embedded in running subsidies has now been saved and allocated to the state governors enabling the prompt payment of salaries to workers and civil servants.
But what has not been said is that the quantum leap in revenues to states from subsidy withdrawal is just half the story. In real terms based on the currency exchange ratio the value of the revenue is even lower than pre-oil subsidy removal levels.
Meanwhile as the government is extolling the oil subsidy removal as a viable economic policy, it has not been able to explain why the promised spending to upgrade critical infrastructure, health, education, transportation etc from the policy has not materialised. Nigerians are also asking whether the explanation that more money is now available to governors can be admitted as a justifiable argument for subsidy removal considering that little or no development has been recorded in most of the states. The telling question also is, does it make economic sense to remove what is for all practical purposes a tool that sustains economic and social justice and give it to governors and the well-connected who deploy it without transparency and accountability? If one of the goals of the subsidy withdrawal is to remove and block waste why then deploy the savings to areas where waste and lack of accountability legion? And as the NNPCL recently stated that N11 trillion had been spent on ‘’energy security costs’’ is that not subsidy by another name from the same area where past subsidy payments have been abused in the past?
Three years on many Nigerians now believe the whole subsidy removal issue has not been handled with the sincerity and transparency it should. The opacity of the operations of the issue from its announcement, continuing implementation and the results so far does not justify the claim that it was done in good faith and in the overriding interest of Nigeria. A policy that in its three years of implementation has brought more people into poverty in its wake, exacerbated the social gap between the classes, fostered the same waste and corruption it was supposed to pull Nigeria out of and by all parameters resulted in the contraction of the economic fortunes of the country cannot be sustained.
President Tinubu should do the right thing by reviewing the policy in view of the current realities in the country. Most Nigerians would readily agree that the oil subsidy issue is the most existential policy albatross of the Tinubu administration and having come thus far it is time to review it. If there is one issue that has brought a sharp divergence between the Tinubu administration and Nigerians this is it.
It is really no use sticking to a policy that has brought more hardship on the people instead of ameliorating it and providing cut and paste paper justification as evidence of its success when indeed the reality says otherwise.
(Concluded)
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