Fuel queue

By JETHRO IBILEKE

A simple statement on the removal of petrol subsidy by President Bola Ahmed Tinubu during his inaugural speech on 29 May, 2023, brought about the worst effect ever on Nigeria’s economy. Tinubu in the speach, had extemporaneously commented that the subsidy payment on imported premium motor spirit, PMS, by previous administrations was “gone forever”.

Less than 48 hours after Tinubu’s pronouncement, the pump price of the commodity jumped from about N198/litre to an average of over N500/litre across the country. This triggered a widespread increase in the cost of goods and services nationwide, including transportation cost. The pump price was further increased to between ₦590 and ₦620, depending on the location in the county.

It is generally agreed that if properly implemented, removal of fuel subsidy has its advantages, like reduction in budget deficits and borrowing by the government, it however triggered a chain reaction, has left millions of Nigerians terrified because of the knock-on effects that it has brought on their daily lives.

Nigeria’s economy plummeted to the lowest ever. Inflation spiked, resulting in increased transportation cost across the country and ultimately contributed to increased prices of goods and services. It also affected the purchasing power of consumers. Prices of commodities, especially food items hit the rooftops. Life became miserable for most families as they could no longer feed properly.

Driving in private vehicles became a luxury available to only a privileged few. Many public and private workers could not afford the high cost of transportation to and from their respective places of work. Primary and secondary school students were also forced to sit back at home for several weeks at the outset.

Beside cost of foods items and transportation, other negative implications are that fuel subsidy removal decreased economic growth in the short term, increased inflation to record high, poverty, crime, loss of jobs in the informal sector and many more. Some industries have closed their operations while others have cut jobs, rendering many breadwinners jobless. Prices of products go up on a daily basis, whereas, the quantities and qualities of those essential goods are reduced everyday. Hunger and starvation stare us in the face. A bag of locally-produced rice that used to sell for about ₦30,000 now sells above ₦60,000.

High exchange rate has further worsened Nigeria’s economy. As at the time of putting this report together, naira exchanges for above ₦1000 to $1US at the parallel market.

The tragedy of job losses triggered the ‘Japa’ syndrome. The nation keep losing its best hands in essential fields on a daily basis, as every Nigerian wants to seek greener pastures wherever they could. Living in Nigeria literally becomes like living in hell! Yes, many have lost their lives and in some cases, some have taken their own lives. It is that bad!

Economic experts have continue to express worry over the precarious situation. They have also not been keeping quiet on proferring solutions. A former president of Association of National Accountants of Nigeria, Dr Sam Nzekwe, commented in an interview with Punch newspaper: “Nigerians have been confronted by severe hardship…due to petrol subsidy removal and unification of exchange rates that have further spiked inflation. The situation is critical, the government has to roll out its palliatives now.”

To address the issue, President Bola Ahmed Tinubu on 7 June, 2023, directed the National Economic Council to come up with inputs on palliatives and the minimum wage review as part of measures to cushion the pain of subsidy removal. Government in the various states also came up with intervention mechanisms to cushion the hardship faced by the most vulnerable Nigerians. Government in most states introduced three working days a week and online. Edo state, for example, also introduced free bus ride on all routes covered by the State-owned Comrade Bus.

Here are the palliatives announced by Tinubu since he assumed office: N75 billion to strengthen the manufacturing sector and increase its capacity to expand and create jobs between July 2023 and March 2024. Repayable short and long-term loan for 75 firms to the tune of ₦1 billion. Tinubu also pledged to empower micro, small and medium enterprises and the informal sector with ₦125 billion; ₦200 billion to support the cultivation of 500,000 hectares of farmland and all-year-round farming practice, to invest the sum of ₦100 billion between June 2023 and March 2024 to acquire 3,000 units of 20-seater CNG-fuelled busses and the ₦1 trillion saved from fuel subsidies to be reinvested into the education sector as loan.

In his nationwide address on the occasion of Nigeria’s 63rd Independence Day Celebration on 1 October, Tinubu announced that the government would provide an additional N35,000 to be paid to the “average worker’s” salary for six months. As palliative to support the yuletide season, the federal government also announced a free train ride across the country and a 50 per cent subsidy on bus fares on all roads for selected public transport companies.

As the Tinubu administration prepares to commence implementation of next year’s budget appropriation, it is pertinent to remind him that Nigerians are in a hurry to see the improved economy he promised them.