Fuel Subsidy: Energy Security Nigeria can’t do without
The Media Advocacy West Africa – MAWA Foundation calls on Mr. Bola Tinubu, the Nigerian President to review his policy on fuel subsidy removal. This is because, the fact before us and other countries’ experience has shown fuel subsidy is energy security that countries cannot do without, because of the vital role it plays in a viable and competitive economy.
Mr. Bola Tinubu, the Nigerian president on assumption of office on the 29th day of May 2023, announced a total removal of fuel subsidy; an action that has led to fuel selling at N617 and N620 per liter depending on where you are buying from. Nigerian state continually complained she is losing huge amounts of money on paying subsidies. The state says it cannot cope with expenses, an argument Mr. Tinubu relied on to justify his action.
We are aware that since the government pronouncement on subsidy removal, transportation, prices of commodities, essential services, and manufacturing costs have gone high, worsening the living burden on the citizens. The Nigerian economy has become terribly worse. Mr. Tinubu’s struggle to stand firm and shoulder the consequences of subsidy removal on the economy is apparently failing.
As Nigerians continue to slide into poverty and the economy shatters mainly as a result of subsidy removal, what the Tinubu government failed to tell the citizens is that globally, countries invest hugely in subsidizing fuel to allow for cheap and affordable energy that will drive production. This is because affordable energy is fundamental for manufacturing. For instance, China, Brazil, France, Germany, Japan, Taiwan, South Korea, and the United States are examples of countries that spend hugely on fuel subsidies. And, just last year (2022), fuel subsidy in different countries globally was estimated to have hit trillion dollars.
The problem with Nigeria’s subsidy removal is that over the years, the country has continued to lack experienced policymakers who will educate the government on good development policies and programs. The policymakers and politicians continually push the narrative that makes subsidy look like a scheme that is a waste of public funds. This is even as they failed to understand that fuel subsidy is the only way to provide cheap energy that will boost production for a viable economy. The MAWA-Foundation is bold to say that the narrative that fuel subsidy is not good is faulty and not true. The propagators of such narratives are working for the private sector to push for market above governance which is the primary purpose of government.
We wish to remind Mr. Tinubu and his government that an import-driven nation like Nigeria needs fuel subsidies to allow cheap energy for businesses that will enable a competitive productive economy. China and USA know this truth and that is why they are among the world’s largest economies.
Should Mr. Tinubu and the All Progressives Congress (APC) forget, the Manufacturers Association of Nigeria (MAN), in its 2022 report, disclosed they expended over N144 billion on generators as an alternative energy source. When you remove fuel subsidies, it means a total collapse of energy security which will render businesses impotent and destroy the economy completely. And this will surely trigger unemployment, poverty, and a high crime rate.
We are sure the Tinubu government is aware that the Kenyan government has been forced to reintroduce fuel subsidies. The decision was taken when subsidy removal led to a high rise in prices of commodities leading to an unbearable burden on the citizens which reversed the country’s economy to a worse state.
May we kindly remind Mr. Tinubu that Brazil, Bolivia, Ecuador, and Indonesia are some of the countries that reinstated subsidy after it had a hugely damaging effect on the poor and the economy. This is even as the (IMF) had forced them to remove subsidies.
There are two things a country must address if it must make progress, energy, and food security. Fuel subsidy addresses the energy security needed for a productive and competitive economy and Nigeria like any other country cannot do without it.
We call on the Tinubu government to fully reinstate the Fuel Subsidy if she is serious about building a productive and competitive economy. The subsidy is not the problem, corruption is, and if the state cannot address corruption and goes ahead to institutionalize it, the reason for the government which is to manage public resources has been defeated.
Mr. Tinubu’s government ought to know that no country builds a competitive and productive economy without cheap and affordable energy that is made possible through fuel subsidies. At the moment, petrol is Nigeria’s energy security and until that changes, removing fuel subsidies will destroy production and render the economy impotent.
Audu Liberty Oseni
Coordinator, MAWA Foundation
