|Protect Over Fuel Subsidy Removal in Nigeria|
Most experts would agree and in this particular circumstance are very sympathetic to what the Nigerian federal government is trying to achieve by ending the fuel subsidy. It is a well known and documented fact that fuel subsidy by the federal government which has been ongoing for a long time has imposed a very heavy fiscal burden on the nations resources. According to Nigeria’s finance minister, Ngozi Okonjo-Iweala, the federal government has expended an estimated N3.7 trillion on fuel subsidy from 2006 through 2011. This is an enormous amount of money which could have been spent on more priority development needs. President Goodluck Jonathan rightly asserts that the subsidy was economically unsustainable and had to be terminated. It is also an acknowledged fact that there are many manifest consequences that will accrue to the Nigerian economy by the removal of the subsidy.
Consequences of Drastic Fuel Subsidy Policy Implementation
The government states that the removal of fuel subsidy will result in increased available financial resources from savings that will accrue for investments in other sectors of the economy like power, education, and health and the building and repair of our road infrastructure. The removal of the fuel subsidy it is also alleged, will reduce smuggling activities from our economy to neighboring countries etc. Nevertheless, in seeking these noble policy objectives, was it absolutely necessary to take such drastic measures to achieve these beneficial consequences? These stated facts and concerns about fuel subsidy as a government policy are not new and definitely need to be addressed. What is surprising to many experts is the sudden urgency and the drastic approach adopted by Nigerian government. Government actions suggest a hasty approach without an exhaustive policy analysis of the issue and as many critics contend, the actions mirror an apparent insensitivity of our policy makers to the negative latent consequences of failing to employ gradualism in this particular circumstance. Did our policy makers not anticipate that a drastic approach to curing the ills of fuel subsidy will result in great political and economic turmoil for the country which could threaten the viability of the economy with significant negative consequences? The general strike called for by the labor unions over the elimination of the fuel subsidy will have devastating consequences if economic activity is brought to a standstill. If the strike continues, shops, offices, schools and petrol stations around the country will remain close for a long period of time causing serious problems to the economy. There is also a latent political consequence associated with the government’s fuel subsidy removal policy shock treatment. There is a growing perception that our policy makers or the political elites of our society are not concerned about the welfare of the general citizenry but are only concerned about their welfare.
|Fuel Subsidy Protesters in FCT Abuja|
What Needs to be Done
The prudent thing that the federal government should have done and ought to try to do now that it is faced with this policy crisis is to tactically and strategically back off its current policy stance and then try to gradually phase out the subsidy over a period of time while maintaining an ongoing national dialogue on the issue. That is how difficult policies are implemented in most western industrial nations.
The federal government should start earnest negotiations with the labor unions and the national assembly (legislature) should be actively involved in finding an amicable and lasting solution to the issue of fuel pricing and prices in the country. Most experts would agree that it may be difficult for the government to back down, but under the present circumstance, it is imperative that our policy makers understand that it is needed and indeed necessary at this juncture.
I conclude by noting that this is a defining moment for President Goodluck Jonathan and the federal government’s reform agenda. The publics trust and faith in the government’s public pronouncements on reform and transparency must be preserved. To that extent, it is vitally important that the administration handle the situation of public protest over the removal of fuel subsidy very cautiously so that it does not destroy whatever modicum of public’s trust that may still remain in favor of the government’s reform agenda.
By Tom Okure, Ph.D
Author and Public Policy Commentator,
Inter-Continental Management Systems, Inc
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