FUEL SUBSIDY WITHDRAWAL: A POST-MORTEM

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These are certainly sobering moments for the nation. The withdrawal of subsidy on fuel has exacerbated the negative outlook of an already tottering economy that had slid into two recessions in the last eight years (2016 and 2020).

 

It has deepened the people’s misery and ramped up serious socio-psychological dislocations. Hunger struts. Despair and suicidal tendencies have taken an upward swing. Insecurity is  heightening as kidnappers are getting more audacious and ferocious. It is akin to Thomas Hobbes’ postulation of life without government being “solitary, poor, nasty, brutish and short.”

 

President Bola Ahmed Tinubu had announced total withdrawal of subsidy on fuel at his inauguration on May 29, last year, with his now viral “The subsidy is gone” declaration. “The subsidy,” he had added, “can no longer justify its ever increasing costs in the wake of drying resources. We shall instead rechannel the funds into better investments in public infrastructure, education, health care and jobs that will materially improve the lives of millions.” 

 

Less than 48 hours after President Tinubu put paid to the subsidy regime, the nation’s oil behemoth, the Nigerian National Petroleum Company Limited (NNPCL), reviewed the pump price of petrol from N189 per litre to between N400 and N570 per litre, over 200 per cent increase.Today, only the NNPCL’s outlets and those of some oil majors still sell at around N570. Most of the independent marketers’ outlets now sell at about N650 per litre. 

 

Owing to the intrinsic multiplier effects of fuel on our national life, the price hike almost immediately shot up the cost of living beyond the rooftops. Prices of essential goods and services, including those of foods and pharmaceuticals as well as transport fares, among others, spiralled astronomically, inflicting pains on the larger population.

 

The labour unions took umbrage at the subsidy removal and its ripple effects. They threatened and mobilised for a nationwide strike. But government was able to stymie the strike through appeals and negotiation. President Tinubu shortly after announced via a broadcast some palliatives to cushion the pains of the withdrawal. They included N500billion vote, plan to purchase 3,000 mass transit buses, payment of additional N35,000 allowance for federal workers and a student loan scheme.

 

Today, it remains to be seen how effective or otherwise the implementation of the palliatives has been, because rather than being palliated, the larger population are steaming in the cauldron of deepening misery. According to the  report of the National Bureau of Statistics (NBS), Nigeria’s annual inflation rate increased to 28.9 per cent in December, 2023, the highest since August, 2005 and above the market expectation of 27.9 per cent, up from 27.3 per cent in the previous month.

 

Unemployment was 4.2 per cent within the same period, an increase of 0.1 per cent from the figure recorded in the previous report. The NBS attributed the surging inflation rate to the astronomical rise in food prices, food and non-alcoholic beverages being the primary drivers. Food inflation rose to 31.52 per cent in October, 2023, up from 30.64 per cent in September, 2023.

 

The withdrawal of subsidy is ordinarily expected to yield a lot of positives if the accruable savings from it are properly channelled to development, as the President has said. One of the reasons he(President) adduced for the subsidy removal was that it had “increasingly favoured the rich more than the poor.”

 

It is, however, saddening that the post- subsidy arrangement not only continues to favour the rich more, especially political leaders, it has further widened the gap between them, plummeting the latter info the nadir of deprivations. The life of the average Nigerian has further depreciated. 

 

According to a  recent World Bank report, poverty rate in Nigeria has  increased to 46 per cent. In other words, about 104 million Nigerians have fallen into the poverty net as at December, 2023.

 

Of course, so much savings have been raked in since the subsidy withdrawal and revenue has ballooned for the three tiers of government, federal, state and local governments, through their monthly allocations. They now consistently share allocations in trillions. For example, they  shared N1.134 trillion in June, 2023, the first month after the withdrawal. The following month, they shared N1.959 trillion; N1.5trillion in August,2023; N903.48billion in September, 2023(a decrease of 196.52 billion); N1.59 trillion in October, 2023; N1.783 trillion in November, 2023, while the amount available for sharing  in December, 2023 was 1.127 trillion. 

 

However, the story was slightly different before the subsidy withdrawal. For example, N1.22 trillion was available for sharing in July, 2022 and N1.26trillion in August, 2022. But the figure was N905.53billion in September, 2022; N957.09 billion in October, 2022 and N938. 62billion in December, 2022. 

 

Nigerians, in acquiescing to the subsidy removal with equanimity, expected their leaders at all levels to show example by curbing their excesses. They expected them to critically look at the high cost of governance and drastically scale it down to free up more resources for development.

 

However, most of our leaders, especially the state governors, are still living large, dissipating resources into ostentation and outright profligacy. In fact, perhaps, enchanted by the humongous revenue now flowing steadily into their coffers as monthly allocations, boosted by the savings from subsidy withdrawal, many of the governors have tended to carry their invidious disposition to a farcical extent. 

 

In these austere times that demand sobriety and frugality, they are making outlandish appointments, expanding bureaucracy. They are padding their payrolls by appointing a risible retinue of aides they ostensibly do not need. 

 

Yobe Governor, Mai Mala Buni, whose state is one of the poorest in country, takes the lead in this ludicrous appointment binge. He approved the appointment of 642 personal aides, made up of 523 special assistants, 104 senior special assistants and 15 liaison officers!

 

His Kano State counterpart, Abba Yusuf, rivals Buni’s feat by appointing a total of 400 aides, including special advisers, special assistants and social media influencers he appointed as “special reporters.”

 

Akwa Ibom Governor, Umo Eno, too recently appointed 368 persons as his personal assistants, representing one appointee from each of the 368 wards in the state. 

 

His Niger State colleague, Umar Bago, also appointed 131 women as coordinators, his own way of including women in his administration.

 

In his own case, Ekiti State Governor, Biodun Oyebanji, appointed a total of 162 personal aides, made up of 79 senior special assistants, 73 special assistants, and 10 technical assistants. A statement from his Special Adviser Media, Yinka Oyebode, said the appointments were “the first batch of the two batches to be rolled out.” 

 

Ahmadu Fintiri of Adamawa State also appointed 47 media aides and 50 special advisers, making a total of 97 personal aides. It is learnt that most of the current governors are involved in the appointment ‘bazaar.’

 

If this kind of insensitive conduct continues, it is discernible that the gains of the subsidy will soon be totally frittered away on inanities, further impoverishing the ordinary people and wiping away disposable incomes. It is highly disconcerting.

 

It is time our leaders at all levels, elected and appointed, returned to the drawing board and curb their egregious tendencies. We must drastically reduce the cost of governance, including pruning bureaucracy, for the subsidy removal to make any sense. 

 

Government officials at all levels must reduce the vehicles in their fleet and convoys, cut down their large entourage concerning their foreign trips and stop general wasteful expenditures. 

 

Our federal lawmakers too must come to terms with the reality of the austere times and acquiesce to slashing their outrageous allowances. A Senator, according to the immediate past Senate President, Maman Lawan,  earns N1.5 million as monthly salary and N13million(52million annually) as quarterly office allowance. A Rep, says Lawan, is earning N1.3 million as monthly salary and N8 million(N32 million yearly) as quarterly office allowance. Nigerians believe our federal lawmakers earn more humongous allowances than this but he did not disclose further when he briefed newsmen then to correct what he called misconceptions about the federal legislators’ earnings.

 

Not only should the lawmakers get their allowances slashed, they should imitate their United States counterparts who operate on part-time basis and only collect sitting allowance.

 

Then, something must be done urgently to arrest the dangerous drift of the naira. Let the authorities convene a parley of experts with a view to charting the best path to earn more foreign exchange to firm up the value of our currency.

 

Nigerians need relief as soon as possible. Let the issues that can palliate their pains in practical terms be addressed. We may need to revisit the Price Control Act to regulate the prices of essential goods and services. The spiralling prices of foods and drugs; as well as those of others that directly affect the people, must be contained as fast as possible. 

 

The military and security agencies should scale up their operations against the murderous activities of bandits who have frightened most of the farmers, especially in the food belt of the North, away from their farms, a development that has accentuated the current food crisis. They need to return to their farms as soon as possible to resume production towards ameliorating the food crisis.