Nigeria Finally Hands Off Fuel Subsidy


Action speaks louder than voice. Nigeria’s government might be going by the maxim. Getting out of subsidy is a major action.

The government has finally made good its plan to get out of an expensive subsidy on petrol that nearly bankrupted the country. Kemi Adeosun, Minsiter for Finance has just announced that the government has paid off all the subsidy arrears it owes oil markets.

The government paid about NGN 48 billion and charged a tax of NGN 5 billion. The government by this action has washed its hands of the subsidy regime and damning all other consequences thereof.

According to Adeosun:

“The gross total outstanding subsidy claims accruable to the oil marketers for 2015 stood at N48.2 billion, while deductable tax liabilities payable to the Federal Inland Revenue Service (FIRS) stood at N5.2 billion only. “


“Oil marketers that were indebted to FIRS and the seven oil marketers that are indebted to the Asset Management Company (AMCON) were not paid until they settled their debts with the two agencies. “

Nigeria’s labour union has vowed to fight the subsidy removal. However, the disjointed nature of the labour union has made it incapable of staging a successful industrial action. One faction of the union backed a night before the commencement of the strike.

Subsidy is a mess. It represents everything wrong with Nigeria. In 2012, the government under Goodluck Jonathan tried to remove but was strongly opposed. Jonathan was accused by many quarters for pardoning oil marketers who abused the subsidy regime increasing the subsidy payment to about NGN 1.2 trillion within six months of his stay as a substantive President of Nigeria.

Nigeria no longer has a choice than to get out of the mace unless it wants to become another Venezuela. Buhari has not also managed the process properly. Key figures in his cabinet kept quiet for a while instead of sensitising the Nigerian public. The confusion in the public made subsidy removal a wicked act from a government that has not done any major good since it assumed office last May.

The failure of the industrial action action called by a faction of the NLC is not a blanket endorsement of Buhari’s decision to stop the subsidy regime but the tiredness on the part of Nigerian who prefer to get the product instead of the long queues they have been subjected to for over three months.

His government has just unveiled a social investment programme to target about 8 million poor citizens who are mainly women, children and unemployed youth. Getting the programme to work for the people is what matters. Getting out of subsidy is not enough, what is done aftermath the decision is what makes the difference.

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