Subsidy Removal

By: Suleiman Abubakar Sodiq

The removal of fuel subsidy has been a highly debated topic in Nigerian politics since 2012, generating dialectical arguments among Nigerians who have taken sides primarily driven by political interests.

Over the years (2012-2023), we have witnessed how political parties prioritize their own interests over the public’s, using public opinion to their advantage rather than guiding Nigeria’s overall development.

One of the major consequences of the 2012 protests against fuel subsidy removal was the ousting of the ruling party (PDP) in the 2015 general election. The Nigerian public became disenchanted with the administration of President Goodluck Jonathan, despite his eventual reversal of the subsidy removal decision.

After the 2015 general election, many prominent individuals who opposed the removal of fuel subsidy eventually acknowledged its benefits after leveraging public opinion to further their political interests.

Former President Muhammadu Buhari, who protested against fuel subsidy removal in 2012, found himself dealing with its effects throughout his eight-year tenure. Towards the end of his administration, the removal of fuel subsidy he once protested against in 2012 was implemented through the 2023 budget, with the expected effective date of June 1st, 2023.

President Tinubu, who also opposed subsidy removal in 2012, recently acknowledged the need for its removal. His announcement has paved the way for the significant hike in petrol prices, almost tripling the previous price.

To many, the removal of fuel subsidy in 2023 was a well-intentioned policy implemented at an unfavorable time, causing significant financial and mental distress for Nigerian citizens.

One of the anticipated effects of subsidy removal in 2012 was the freeing up of resources for improvement in other sectors. If it had been removed back then, many sectors would have seen considerable progress by now.

Moreover, the price increase in goods and products in 2012 would have been more manageable compared to 2023.

Furthermore, if fuel subsidy removal had been implemented in 2012, Nigeria’s dependence on imported fuel may have decreased as domestic refineries could have been encouraged to produce more petroleum products. This, in turn, could have strengthened the nation’s economy and provided more job opportunities for Nigerians.

The removal of fuel subsidy is a policy that the Nigerian elite have consistently opposed, largely due to the advantages it would bring to the average Nigerian. Redirecting the funds meant for subsidy to other sectors would encourage the rapid growth of domestic refineries.

Had Nigerians embraced this policy in 2012, they would have adjusted to it, and the country could have invested the largely unaccounted subsidy funds in impactful programs for its citizens.

The reality now is that Nigerians, on whose behalf this decision was made, continue to bear the brunt of increased living costs, while experts who recognize the benefits of the policy ironically support it.

Only time will tell how Nigerians will adapt to the impact of this policy and how it will manifest itself in the future.

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