It’s just about four weeks since President Bola Tinubu put an end to the oil subsidy regime. Given how long his predecessor had toyed with and abandoned the idea, it wouldn’t have felt out of place for many Nigerians had Tinubu waited a little more before plunging them down the abyss of costly petrol per litre.
From 183 naira to 500 naira per litre is quite a leap. At half that price at any other time in the past, Nigerians had taken to the streets in their millions. Removing oil subsidy was a dreaded terrain no Nigerian leader dared to tread on not to say rush in as Bola Tinubu did within minutes of his taking over the reins of government.
At least three times in his last year in office President Muhammadu Buhari kicked the can of oil subsidy removal down the road. After his last unsuccessful attempt, during which there were discordant tunes from the presidency, the leadership of the Ministry of Finance and the Nigerian National Petroleum Corporation, NNPC, on the one hand, and oil marketers on the other hand, Nigerians were left in no doubt that that decision had become a booby trap for whoever succeeded Buhari. The failure to act was a sinister move that left many Nigerians wondering and projecting in pity what turbulent ride Bola Tinubu was bound to encounter after he was declared winner of the 2023 presidential election.
In light of his travails and all he had had to pass through shortly before, during and after the election, the lack of action on the oil subsidy issue by a government and a president that was still negotiating loans and signing agreements on behalf of Nigeria up to its last few hours in office, seemed totally foreboding and dangerous. While President Buhari technically took the oil subsidy regime off oxygen by making no provision for it in the 2023 budget, he left its execution (with all its menacing details) to his successor at the end of June, one clear month after he would have left office.
Nothing could have been more cowardly or shown that decision for the hot potato it was than that lack of will on the part of the departing administration. But Bola Tinubu approached the matter gingerly and perhaps naively. Everything could have blown off in his face. His words ending the subsidy on oil sounded urgent and very matter of fact. More or less like a decree. It was without ceremony and its effect was almost instant. Fuel stations didn’t waste time before they readjusted their gauge and jerked up the metres.
In hindsight, it was perhaps the right to do. It left no room for the usual bickering and unending mulling over of the pain that was to follow such a tough call. It also didn’t give labour leaders the opportunity to grandstand and pretend to be fighting on the side of the people while lining their own pockets. Nigerians had already been pummeled beyond words and they were ready to face whatever awaited them in the forest of astronomical oil cost. The effect was shocking but far less aggravating than the picture of Armageddon some had predicted. Nigerians started weathering the storm, as they have been doing one month on, in a matter of days.
Soon the plaudits would follow for the president’s audacious move and the decision looked all right, leaving some wondering why it had not been taken earlier. Things were beginning to look so right. Soon followed by the decision to unify the exchange rate and give presidential assent to a student loan scheme among others, the “immediate effect” actions of the president are winning him more support of Nigerians than their condemnation. So right and promising do these decisions look now that President Bola Tinubu could boldly take personal credit and responsibility for the one on the removal of subsidy.
Nigerians now know that he ignored the counsel of his advisers not to breathe a word on the contentious issue when he proclaimed the end of the subsidy regime in his inaugural speech. We can’t do more than speculate about where the president would have stood, how he would have reacted, had his words taken a different turn on Nigerians. Would he have owned them or claimed they were taken “out of context”? Could he have blamed his utterance on a misguided speech writer that inserted those words without his knowledge or would he have simply admitted he over spoke?
In choosing to support the president for the tough decisions he has had to make on their behalf, Nigerians have merely chosen to postpone personal gratification while embracing the discomfort of their present predicament. They can’t yet see the promised benefits of these series of economic decisions that have the immediate effect of leaving them in financial turbulence. Nigerians are far more exposed economically than they have been at any time in recent memory. They see the outcome of the recent monetary and fiscal policies of the Tinubu administration that is drawing the country farther into the orbit of western neo-liberalism as the bitter pill that must be taken before the process of national economic healing.
This is not the same thing as saying that Nigerians should be left exposed to the bears of western capitalism nicknamed market forces. They need to and must be protected by government policies that would not make them prey of powerful economic entities operating individually or as a group from within and especially outside the country. To seek then to raise the tariff on electricity by as much as 40%, as is being planned from next month and so soon after the removal of subsidy on oil, cannot but further put Nigerians in very precarious economic circumstances.
As with the oil marketers, the electricity companies (the GENCOS and DISCOS etc) that acquired the government-owned monopolies of National Electric Power Authority, NEPA and the Power Holding Company of Nigeria, PHCN, have been heavily reliant on government support, read subsidy, for the entire decade of their existence. Yet they have never broken even, making less than 40% of what the old power monopolies made as revenue. The shortfall in income is covered by Abuja in the same way it did for petrol until a month ago. But Abuja is tired and has decided to end its support.
Yet, this is not the right time for this. While he may appear to have got away with the decision to remove oil subsidy and the potential increase in the cost of higher education, President Tinubu must be careful neither to push his luck too far or too fast. Otherwise, he could be biting off far than he could chew. He could make haste slowly.
