This must be one of the most exciting moments in our politics. Perhaps, for the first time in this republic the political campaign is being anchored on an issue that is most pertinent to most Nigerians: the issue of fuel subsidy. We have the Presidential candidate of the African Democratic Congress (ADC), Alhaji Atiku Abubakar to thank for that.
Unfortunately, the government has reacted mostly with personal abuse directed at Atiku or with statements that cynically denies the lived reality of majority of citizens. Atiku’s subsidy declaration has effectively turned the table. The government has now found itself in opposition against a daring idea that is made popular largely due to its catastrophic mismanagement of a policy that used to be a point of consensus among presidential candidates. This administration has had three years to make the people see the wisdom in the removal of fuel subsidy, if not the full benefits, but they did not. They are not likely to achieve that before the elections.
The most important point that the government is missing is this: the debate that Atiku has started is not just about fuel subsidy. It is about bringing down the cost of living, which has soared beyond the reach of the majority. Fuel subsidy is therefore only a strategy in bringing down the cost of living and giving respite to suffering citizens. Even government has not been able to deny that the removal of fuel subsidy has caused so much pains to the people. They only say that the pains are necessary and would be worthy of the gains when they eventually arrive. When? They never could tell.
Even as poorly as they have made their own case, there are a few areas where one would agree with the government. One is that the economy that was handed to Bola Tinubu in 2023 was tottering on the brink of collapse and required desperate measures to save it. Two is that the old subsidy regime had been mismanaged and the fiscal burden had become ruinous. On the second point, President Tinubu would not be the first to see that. Successive governments, perhaps, since General Babangida, also saw it. But they also recognized the dilemma and the political complexity.
The old fuel subsidy regime was like a highly toxic, but necessary medication. If you continue to administer it, it may eventually kill the patient. If you withdraw it, the patient faced terrible pains, and may eventually die, still. This dilemma was the reason past administrations did not see the removal of subsidy, even as attractive as it was, as a simple, easy solution. President Tinubu did not see this dilemma. He did not hesitate. He thought his predecessors were cowards. He mistook recklessness for courage. Heady with the supreme authority that was just conferred on him, he swaggered into the Intensive Care Unit (ICU) and pulled the life support.
Public policy is about managing alternatives. None of which may be cost-free in terms of the trade-offs or the loss to those who are likely to bear the brunt of change. But policy experts understand that the challenge is in finding the option that delivers the optimal outcome with minimal or, at least, manageable cost to the those who would be required to make adjustments as a result of change. They understand that reforms hardly fail because they are technically unsound. They fail because the reformers fail to manage the politics of it, especially in terms of what the people would be required to give up, and what alternatives or succour is being provided. Therefore, defending a reform on the promise of benefits that would arrive sometimes in an indeterminate future is never enough.
The presidency and some so-called experts have dismissed the ADC candidate’s promise to return subsidy as mere populism, unrealistic or even anachronistic. But merely discrediting an idea is not an alternative idea. If we agree that what we are faced with is, at least, the devil’s alternative, what the experts should be doing is to suggest alternatives rather than merely dismissing the one on the table.
Those on the side of government have insisted that the removal of subsidy was absolutely necessary. Yes, it may be necessary to amputate a leg in order to save the entire body. But when you do that and you don’t provide, at least, a crutch, you do not blame the patient if he does not appreciate that you have crippled him.
The President’s men point at the humongous sum of N5.5 trillion shared in the month of July alone as evidence that the removal of subsidy has been worth the sacrifice. If anything, this kind of argument only gives further ammunition to a hungry, suffering people who cannot see the benefits of this trillions of Naira in their lives. The states today are awash with so much money than most of the governors know what to do with it. The story was told of a governor who broke into delirious dance when he saw the bank statement. He went green in the eyes, and asked his finance commissioner, ‘you mean all this money belong to us?’
What has happened with increased allocation to states is a parody of the so-called ‘trickle-down effect.’ The state governors under President Tinubu have received more money than any other generation of governors. But their conducts have made it difficult for anyone to accept this as a benefit of fuel subsidy removal. While the governors get richer and richer, the people who actually bear the brunt of the removal get poorer and poorer. Travel across our country today, the best that majority of the governors have to show for increased allocation are fly-over bridges, even where there is no traffic, and some other such hair-brained projects. Meanwhile, rural roads remain decrepit, hospitals have no basic drugs, transportation remains expensive, not to talk of food.
Should President Tinubu be blamed for this? Not totally. But he missed a great opportunity to do something truly remarkable. We have complained about the threat of one-party state and all governors jumping into the ruling party. This, however, has a possible advantage. With 32 governors, and almost the entire National Assembly in the president’s party, it becomes easier for the president to forge a consensus around how to effectively utilize the revenue windfall to cushion the debilitating impacts of the removal of subsidy.
They could have easily agreed to ring-fence the ‘extra cash’ for those programmes and projects that would ease the suffering of the people. By not doing this, Tinubu may have wasted a major political capital. Agreed, the president does not possess the discretionary power to decide what the states get, or even to withhold what is due to them. The president however has the political authority to get the governors to commit to a minimum delivery standard, especially regarding safety net issues. Afterall, he is the master strategist. Isn’t he? Infact, I doubt if any other president, apart from Buhari, perhaps, commanded the kind of political capital that Tinubu wields should he desire to get the governors to commit to an agenda of development. But he did not, probably because the welfare of the people was never a part of the agenda.
Quite importantly, a political party exists for a reason. One of them is the platform it offers to fashion a common agenda and to insist on its implementation across the states. There is sufficient historical evidence for this in Nigeria. Besides, a true mark of leadership is the ability to get people to agree to do what they would ordinarily not want to do, even when you do not have the power to compel them to do it. A significant part of the blame for the profligacy that we have seen therefore reflects President Tinubu’s failing as a leader, and APC’s lack of moral credibility as a political party.
At the height of the crisis in the Middle East, oil price went beyond $100 as against the $64 benchmark in the budget. We used to have what was called ‘excess crude account’ to warehouse this kind of surplus. They said that is illegal. But even in sharing the money, the least that the president could have negotiated was a common agreement that the extra cash be spent directly on the people, and then find a way to incentivise the top performers.
Atiku said he will not bring back the old subsidy system. Yet, most of the government argument has been against the old subsidy regime. What Atiku promised is subsidy on production. The theory is that if the cost of production decreases, the cost of fuel would also go down, without artificially fixing prices at the pump. Examples of this approach abound across the world. Is this approach risk-free? Certainly not. Is the risk worth taking? Certainly yes.
Earlier this month, President Tinubu signed an executive order known as the Deep Offshore Oil and Gas Projects Incentives (Tax Remission) Order 2026. Strictly speaking, this is a form of subsidy on production. By offering Production Tax Credit (PCT) of $3.00 to $4.50 and up to $11.50 per barrel, government is committing to forego revenue in oder to lower operating costs. The fact that it bears no direct cash outlay from the government does not make any difference so long as the policy reduces the liability of the oil companies to the Nigeria Revenue Service. The fundamental difference however is that while Atiku’s production subsidy is targeting benefits at the people, Tinubu’s surreptitious subsidy, is targeted at incentivizing oil merchants without corresponding obligation to the people.
They ask, where will Atiku get the money for this subsidy that he is promising. Maybe we should start with government re-setting its priorities. A government that is willing to commit N1billion per kilometre of road, spend $100 million on a new aircraft for the president, buy new luxury cars for party women, that government forfeits the right to ask people to continue to endure hunger. You cannot have majority of your people living below the poverty line as a result of your policy, no matter how justified, while you continue to live the life of an oil sheikh.
Government has justified the Lagos-Calabar coastal highway, perhaps the most expensive, but certainly the most opaque, of such projects in the world, on the grounds that it was a necessary undertaking that would unlock future economic opportunities. Yet, it is difficult to find many roads in Nigeria today on which people can travel safely and comfortably, especially the ones that the people really need to get to the farms or the markets, or simply to get home.
True, man shall not live by bread alone. But even the bible did not say man should live without bread. Interestingly, Tinubu himself appeared to understand this principle so well. I recall that in the buildup to the 2023 election in Kaduna, candidate Tinubu at the time was asked to speak on the issue of climate change and the pressure from western countries for Nigeria to embrace some of their prescriptions. He answered by asking rhetorically, ‘How do you prevent the church rat from eating the poisoned holy communion?’ He then added: We are a poor nation. They banned coal. They say firewood is not to be fetched. They say we need to plant more trees and they are not giving us money. We need to open our eyes. We need to tell the West, if you don’t guarantee our finances and work with us to stop this, we are not going to comply with your climate change.’
That’s probably the most nationalistic thing that Tinubu has ever said. But so much has changed since then. Tinubu has become President and he no longer cares if the church rat starves to death. He no longer thinks that the church rat, left with no option, would eat anything no matter how sacred or profane. Even if the return of the fuel subsidy is the poisoned chalice that they want us to think it is, how do you prevent a desperately poor people from embracing it when they have nothing else to depend on.
The APC and President Tinubu know that the Atiku solution to subsidise production as a way of lowering the pump price and bringing down the cost of living is a bold idea and they know it resonates with the people. This is why they have been quite busy of late. They have dismissed the idea as populist or election-pandering. But as long as they are not able to offer an alternative on how to make life better for the people, it remains the only idea on the table, and Nigerians will take it.