Following his assumption of office seven weeks ago, President Bola Ahmed Tinubu’s first policy announcement was the removal of the contentious fuel subsidy regime.
Informed stakeholders had said over the years that the fuel subsidy, which was conceived to bring economic relief to the average Nigerian, had since been hijacked and transmuted into a conduit by a faceless cabal within the system to drain the country of its very lifeblood.
President Tinubu, in a swift and decisive move on inauguration, knocked off the fuel subsidy, promising to hedge the anticipated effects.
Just as swiftly, the price of petrol galloped from the range of N185 per litre to N500 and, recently, to over N600. Transport fares, food prices and sundry costs likewise shot up, causing untold discomfort to citizens and an outcry across the country.
It soon became apparent that not enough groundwork had been done at federal level in the build-up to the removal of the subsidy, as the talk of plans for palliatives were coming up side by side the announcement of the subsidy removal, when in fact the relief plan should have come reasonably ahead.
A few state governments moved quickly to render relief.
Edo State Governor, Godwin Obaseki, moved ahead of the pack in bringing relief to citizens. So did his Kwara State counterpart, Abdulrahman Abdulrazak.
Governor Obaseki reduced the number of office workdays for civil servants in the state from five to three to relieve them of the increased transport cost.
Obaseki further kicked off free 24-hour Wi-Fi Internet services across various Ministries, Departments and Agencies (MDAs) and other public places in Edo State. This was to enable civil servants, students and others work and learn from home or remote locations close to their homes or schools.
On his part, President Tinubu on July 7 directed the National Economic Council (NEC) led by Vice President Kashim Shettima to begin the process of working on interventions to mitigate the impact of subsidy removal on the Nigerians.
As the days went by, the National Assembly okayed a N500 billion palliatives request by the President to distribute N8,000 to 12 million households over a six-month period. The N500 billion palliatives proposal has since generated much controversy in the country.
Days back, the Nigeria Labour Congress rejected the Federal Government’s planned N500 billion palliatives to cushion the effect of fuel subsidy removal.
Joe Ajaero, the President of NLC, said: “There is no other way to explain the proposal to pay a miserly sum of N8,000 to each of the mysterious poorest 12 million households for six months, which amounts to N48,000, and pay just 469 National Legislators N70bn or about N149m each, while the judiciary that has about 72 Appeal Court Judges, 33 National Industrial Court Judges, 75 Federal High Court Judges and 21 Supreme Court Judges and a total of about 201 Judges receives a total of N35bn or N174m each.
“If these other two arms are projected to receive this, what members of the Executive Council will receive is better left to the imagination of Nigerians; perhaps, the balance of N150bn will go to them.”
There are various shades of opinion on the matter.
All said, fuel subsidy removal is aimed at achieving long-term economic sustainability.
However, the consequences have proven to be particularly harsh and unsettling, especially for low-income earners.
As such, identifying immediate solutions that can cushion the effects of this policy change must be a top priority.
Some stakeholders have suggested direct interventions into subsidized transportation for commuters and goods across the country with existing palliative budgets.
Well-structured and managed, it seems this could prove more impactful. On the other hand, N8,000 given to 12 million households over six months would hardly scratch the surface, given current inflationary trends. The money would likely quickly fade away with little impact.