No sane government should watch its citizens suffer untold hardship and live in poverty. The primary responsibility of government is to protect the life and secure the welfare of its people. President Bola Tinubu spontaneously announced the removal of fuel subsidy on the day of his inauguration without considering its attendant consequences.
In fairness to the removal, the amount of money claimed to be paid on subsidy in Nigeria was quite humongous from N300 billion during the Goodluck Jonathan administration in 2012, to N2.7 trillion in 2022. However, beyond the doubt as to the authenticity of the real value paid on subsidy, the secrecy and corruption associated with the entire subsidy regime was reprehensible. It was as a result of this, that many Nigerians canvassed for the removal of subsidy.
Nevertheless, there is a school of thought who believes that government was not sincere in petrol consumption and subsidy payment. Also, even where several reports indicting subsidy saboteurs were released, the federal government did nothing to investigate and prosecute those accused of corruptly enriching themselves from the subsidy payments.
Therefore, subsidy on its own was not the problem but the willingness of government to come clean with its transaction on subsidy payment and muster the political will to stop corruption was the major problem. The view on re-introduction of subsidy becomes necessary given the fact that subsidy is a common global practice by governments.
The subsidy regime cushioned a lot of hardship among Nigerians in the past and with its removal, today, Nigerians have not been able to recover from the effect, given the continuous increase in the prices of all commodities. Most workers do not report to work on a daily basis, some business closed shops and the general standard of living has reduced. Coupled with this is government’s refusal to control prices of commodities.
The lack of a price control which was hitherto implemented in the 70s has made it possible for middle men to determine the prices of commodities in the market. The practice of middle men is to acquire these goods from the dealers and hoard them to create scarcity and speculate a market price before they sell with wide profit margin.
If government enforces the Price Control Act as ordered recently by the federal high court on goods and commodities, the hoarders and speculators would run out of business and food items and other commodities would be available at the normal rate. The lack of a price control mechanism is what led to the failure of most government’s policies on agriculture.
It is so unfortunate that the President Muhammadu Buhari government made efforts to encourage local production of food commodities such as rice, but instead of having the price of rice reduced, it rather led to more than 200 percent increase. Rice which was sold for N9600 before the ban on imported rice, skyrocketed to N19,800, at a point, it rose to N36,000 and the government could not do anything to stop the hike.
Under this present administration, a bag of rice sells for N77,000. It is an anomaly for government to provide incentives to local producers of commodities and at the same time, does not have control of the market price.
In light of the above, in the interim, the federal government should re-introduce subsidy on petrol and diesel under a more transparent regime and deal with saboteurs who divert the products to other countries. In the long term, the government should get our refineries working at optimum capacity so that any attempt to remove subsidy on petrol and diesel will not have much impact on the price on petrol.
Also, a list of commodities and items produced locally should be established and the market price should be determined under a price control, stabilisation and mechanisation regime. Government should enforce the laws and policy on price control. Finally, for resource mobilisation, government should stop oil theft so that more resources can be generated from crude oil to help us pay for fuel subsidy and the functionality of our refineries.
Victor Emejuiwe,
Monitoring and Evaluation/Strategic Communication Manager,
Centre for Social Justice,
Abuja
08068262366
