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The news, when it broke last week, was hardly surprising. Call the President any name you like. This was one time it pays to be a coward even when it comes packaged with monumental consequences for the economy and the country. A lot of tension was easily doused; the day of Armageddon postponed. It was to be the day of seemingly self inflicted trouble for the Buhari government. Yet all agree that this now postponed policy is inevitable, that the government cannot continue to shoulder the huge subsidy.
Nigeria Labour Congress, NLC, which had long been flexing its muscles in preparation for the proposed nationwide strikes by workers on 27th January and 2 February was the first to react and drink the chill pill. It suspended the series of strike actions it had marshalled to counter the intention of the federal government to finally remove the contentious subsidy on petrol this year.
Senate President, Ahmed Ibrahim Lawan, had earlier become a self appointed spokesman for the Buhari government in its attempt at dousing the impending fire. He donned a damage limiting toga and came to the public to say that President Muhammadu Buhari has never told anyone that he will remove the subsidy on fuel sometime in April this year. He of course was lying through his teeth. His puerile attempt did nothing to ameliorate the seething anger threatening to boil over in a few days.
It is auspicious however, that the Buhari government, seeing what is happening around its neighbouring countries, where street protests have led to opportunistic coups in Mali, Sudan, Guinea and just recently, Burkina Faso, had to bite the bullet. There was urgent need not to allow some military adventurists and anti-democratic forces to capitalise on the discontent of the people, which was geared to boil over with removal of subsidy on petrol. In the neighbouring West African countries which have recently tumbled over into military rules, similar social, economic and security situations like ours, including jihadist terrorism, have been the catalysts.It therefore makes sense to shelve the proposed removal.
The government which did not make any room for subsidy in its 2022 budget had to hurriedly came out when it had become inevitable that the economy would be grounded to a halt, with dire consequences on its trail. Even without any perceived coup threat, it could be calamitous if the series of strikes to be embarked upon by the NLC, were allowed to go on. Finance minister, Zainab Ahmed, who broke the news of the suspension of the removal of subsidy on petrol, informed that the Buhari, government has realised that the timing of its planned removal of petrol subsidy is “problematic” and will worsen the suffering of Nigerians.
She also informed that the 2022 budget passed by the National Assembly will now be reworked to accommodate subsidy which is projected to be around N3 trillion. Don’t forget the 2022 national budget for the country is only N10 trillion. For a country already saddled with servicing its humongous debts profile with over 48.5 percent of its expected revenue intake, the Minister did not say where the fund for the subsidy will be prised from. But Special Adviser to the President, Femi Adesina had the answer: Nigeria has no option than to go borrowing again.
Once again the Nigerian Labour Congress wins. Fuel importers and racketeers win. The economy loses. The Buhari government loses face as it faced its fear, damned all consequences and did the right thing by the country.
The fuel subsidy albatross has been the Achilles heels of succeeding governments in Nigeria. Even the lion hearted President Olusegun Obasanjo had to also bite the chill bullet. Yet there is no economist worthy of the name who is in agreement that Nigeria should continue to fritter away its very lean resources on subsidising a critical item like petrol. But because we have failed to refine our fuel locally, despite the huge acreage of crude deposits; and because we have failed to properly turn around the four comatose refineries, or build new ones, fuel subsidy has become the nation’s invitation to economic and political implosion.