Issues surrounding removal of petrol, forex subsidies and Tinubu’s $1 trillion economy

President Bola Tinubu

By Uche Nnadozie

The removal of petrol and forex subsidies has indeed been a significant economic policy change, and it has stirred various opinions and concerns among Nigerians. President Bola Tinubu’s goal of pushing the economy to a $1 trillion GDP by 2026 is ambitious and requires substantial economic restructuring.

Speaking at the 29th session of the Nigeria Economic Summit Group (NESG) on Monday, the president maintained that, “To stimulate economic growth, we announced the end of a crippling fuel subsidy regime and the unification of foreign exchange rates.

“Combined with the effects of an unsustainable fiscal deficit and hidden subsidies, these factors distorted the money supply and created an unfair playing field for an elite crop of unpatriotic forces. But that is no more. These changes have been tackled head on.”

It’s clear that the subsidies, particularly on forex and petrol, were unsustainable and had contributed to economic distortions and under development.

Like every other contemporary issue, some commentators have taken the saying that a problem shared is a problem half solved to heart, believing every word in the phrase.

That’s why when I hear them complain bitterly about the forex challenge for example, I express my sympathies following the detailed problem analysis I get confronted with on a daily basis. Everyone appears to know the problems inside out, thus expecting the solution to be as easy as finding keke in Kano!

Some think that if they over analyse the problem it therefore means the solution is in the details. From my layman’s corner, the economic issues we face are deep, therefore we need deep solutions.

As the Turkish will say, no matter how long one has travelled on the wrong road, it’s best to turn back. Tinubu and his team have decided that it is time to make the turn which previous administrations feared to do.

However, as with any major policy shift, effective communication and education about the rationale behind these changes are essential to gain public understanding and support. Presently there is too much ignorance in the public domain regarding the state of the economy.

The challenges that Nigeria faces today are the result of complex economic issues that have built up over time. While the removal of subsidies may lead to short-term hardships, it’s seen as a necessary step towards long-term economic stability and growth.

The government must continue to communicate its plans for economic revitalization and work on reducing public perception that government officials are merely self-serving.

Ultimately, achieving the $1 trillion GDP target will depend on various factors, including prudent economic management, investment, and fostering an environment conducive to business growth and job creation.

These are significant challenges, and the government’s commitment to addressing them is crucial for Nigeria’s economic future.

*Nnadozie is a journalist and public affairs analyst