Subsidy Withdrawal And Urgent Need For Palliatives

Now the original opponents of subsidy withdrawal have come to terms with the reality of the economic situation and finally agreed to taking the action.

Former President Muhamadu Buhari and the new President Bola Ahmed Tinubu and all their men have  stoutly opposed the planned removal of subsidy by the then administration of former President Goodluck Jonathan on grounds that it will create the present situation of untold hardship and suffering for the people. Their supporters  believed them and joined in mobilising themselves against the past government leading to its ouster in 2015. In the last 8 years the Buhari government was confused about the matter and could not muscle the courage to do it.

But the reality kept dawning on every successive government until the new President, smarter than Buhari, moved swiftly to immediately  removed it conscious of the huge financial and economic consequences awaiting his administration. Subsidy withdrawal means the government not paying for the difference between pump price and the actual cost of importing the refined fuel products which is being done to augment for the big businessmen while the masses bear the brunt.

To underscore the very essence of the contentious subsidy regime, almost all the 2023 Presidential candidates were opposed to its continuation. They believe that it was not in the interest of the nation to continue to make the rich richer and the poor poorer by promoting their economic interests and compounding their woes,respectively. It has been very ridiculous to note that previous administrations in the country have spend more money on subsidy than education, health, agriculture and even security even when the latter is the biggest problem of the nation. Many sectors have collapsed because of insecurity and past governments have chosen to look the other way round. There is no way key ministries like those of finance,budget and planning in connivance with some relevant agencies will feign ignorance of what was happening. They can not in all honesty be absolved of complicity because the approvals and releases go through them without  any queries and questions.

For 8 years, Buhari kept singing the subsidy withdrawal song without a single action and  the political will to do something and change the narrative. Thanks to president Bola Tinubu for taking the bull by its horn even though he was part of those who led massive revolts against it during the regime of Jonathan. Its now very clear that the then opposition was doing it for pure political reasons to upstage the then ruling party in government. But such political misadventures have caused the nation hugely some grave socio- economic consequences that will take years of meticulous replanning,sacrifices and pains  to recover. It would have longed been resolved if the then opposition parties and groups had sacrificed their political biases to allow the policy go on. But its better late than never.

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What has created serious crisis on the matter was the recent hasty Presidential statement that the subsidy will be withdrawn without delay. The fragile economic environment could not absorb that shock and the market situation immediately changed countenance and soon the marketers began to hoard old stocks thereby creating artificial scarcity even before government will sit to agree on a template. That has forced government to rush in fixing prices for different locations.

The policy action is too sudden and too hard for the majority of the people to bear. It’s almost impossible in some instances. This is because the gap in differentials is too big to be managed by many individuals especially that there are no palliatives anywhere and at any level to cushion the effects of such a sudden action. The purchasing power of many individuals is still as poor as it was many years ago. People have not come to terms with the existing economic situation of unemployment, poor and lack of salaries and even the recently introduced  currency changes and cash shortages. This can only compound the existing problems of the people under an extremely high cost of petroleum products regime.The labour community which is the most hit is mobilising to oppose the policy and the security community which the government needs to help may not do much because they are also affected as human beings.

Even though subsidy removal is an economic neccesity to free resources and plough them back towards the development of other critical sectors, provide infrastructure,education, boost agriculture, etc its sudden withdrawal without palliatives can create more harm to the economy and the people than good. It can heighten inflation if measures are not put in place to fill in the gaps. Already the purchasing power of the people is weak, and therefore they cannot cope with high cost of living,increase in prices of fuel itself and all other goods and services. Transportation cost has multiplied and the cost of housing, food, clothing,etc has also skyrocketed. Because of the corrupt nature of the marketers in our country, there will be continous increase in the pump price as the marketers will keep conniving among themselves to hoard the product by creating artificial scarcity to make permanent the suffering of the people.

In some countries where things are done right for the interest of the people, measures are normally put on ground before such policies are implemented. In Indonesia for instance, government was said to have commenced mass cash transfers to its citizens as palliatives so as to strengthen their purchasing power and cope with the subsidy withdrawal within the critical period. In the United States for instance, such massive cash transfers were witnessed during the COVID-19 crisis as palliatives to cushion the effects of the corona crisis.

The federal government of Nigeria should use the 3.6 trillion naira budgeted for in the 2023 budget for subsidy to provide palliatives to Nigerians and make life easy for them. The provision is to take care of the subsidy for 6 months beginning from January to June. We are still in June and therefore the action is still within the time frame. Last year 443 billion naira was budgeted for the same period and the money went down the drain. The FG can use these funds to augment for the people while it commences gradual withdrawal of subsidy. People must not die in the process of implementing any good policy to address an economic problem. If it will take the people to die before addressing a nation’s economic problem, then its not worth it. For whose interest is the government trying to subsidise or withdraw the subsidy? Its believe for the people and the nation. If so, then it behoves on the government of President Tinubu to act fast and be sensitive to ensure that no one dies in the course of withdrawing the subsidy. It is a very big shame that since the issuance of licences for the building of domestic refineries to refine domestic petroleum products, not a single refinery has been put in place. We commend the recent individual effort of Alhaji Aliko Dangote for taking the bull by the horn  in starting the process for  the nation. We believe that his action will encourage other businessmen and women to follow suit to open the economy and gradually make fuel available, reduce its price and create massive jobs for the people to reduce poverty and crime.