The subsidy debate has brought to the fore, the sordid reality that successive governments since 1999, have failed the Nigerian people, in doing away with this highly corruptive channel of providing PMS (petroleum motor spirit) through imports. For over 20 years, the monumental fritting away of our foreign exchange by this monster, has been left unchecked and unhindered. At some point, it was estimated that our daily consumption level was 35 million litres. This has since multiplied to 50 million litres and going by the figures of our fuel importation bills, we are well over 70 million litres per day.
The Nigeria Customs Service had brought to our attention that most of the service stations near our borders were just conduit pipes to smuggling subsidised fuel to our neighbouring countries. There is an additional 150 Naira per little or even more, to be made when trucks of PMS are smuggled out of the country. Some marketers are in court over the falsification of their import documents, and for round tripping, which one could say, constitutes a very large percentage of our fuel import bills.
Fuel importation is fraught with fraud and we are unfortunately subsidising fraud, as against subsidising PMS; or perhaps doing both!
The best time to have halted subsidy by this government was back in 2015. The next best time would have to be after the elections or even a few days into the new government in 2023. We all agree that it is not sustainable.
Proponents of a free market economy have had a field day in arguing against it and this time they are spot on.
However, Nigerians believe that subsidy is the only avenue whereby government spending goes into their pockets directly. They don’t have faith in their government, that the trillions that are supposed to go into subsidy, would be utilised in providing other critical infrastructure. This belief is legendary, even though the present government has shown quite an appreciable level of integrity, as far as infrastructure is concerned.
A Personal Assistant to the President, Ms. Lauretta Onochie, had revealed that the Presidency would be seeking an approval of 3 trillion Naira from the National Assembly, for subsidy payments in 2022.
The IMF has always egged the FG to wean us off subsidy. The Nigeria Governor’s Forum may have bought into it as well.
The National Economic Council is also predisposed to doing away with subsidy, as it had earlier said that it would take a decision come June, 2022. All the economic indicators have never been in favor of subsidy, despite Nigeria being an oil producing state, albeit sadly, without a functional refinery for decades.
Having functional refineries atleast, would have been a free ticket to taking out subsidy. As it is, the harsh economic realities are too bullish to contend with. This is not just for the common man, as even middle income earners would certainly squeal at this.
Having said that, no one is appreciating the fact that the global economy has suffered the setback of a pandemic that has set inflation on an astronomical rise. Prices have tripled and quadrupled globally, and it is not just a Nigerian thing, or a PMB administration anomaly.
We are at cross-roads, where the level of volatility and tensions in our society is pitch high and suffocating. The quantum of manipulators and enemies of state and their activities are at their most notorious state. So a policy like this, at this crucial time, is just playing to the gallery of obstructionists, and unpatriotic zealots. Some have been calling on military coups, likening Nigeria to Mali and other unstable West African countries.
So the idea of shelving the subsidy removal was a ‘tactical Maradona’, on the agents of destruction. We all saw how the endsars protests turned to end us all protests. The subsidy protest can easily become the much anticipated Nigerian spring which has not seen any water yet.
From a humanitarian angle, considering how Nigerians increase the price of everything even when the fluctuation of some variables have nothing to do with the prices of their products — a price of 302 Naira per litre is simply not feasible. A one-off removal is not the way. A two or three step approach, spread over time, would be a better way to atleast cushion the effects. When the Dangote refinery comes on stream, fuel should still cost lower than the anticipated 302 Naira; meaning that it should also be subsidised atleast; afterall the government has a stake in the enterprise. For now, our stability is more important than any style of market economy. 3 trillion is not too much a price to pay, to avert anarchy.