THE SUBSIDY ISSUE

Fuel subsidy has become the topic of discussion in all gatherings since we were blown away by its removal on the first of the New Year. Some applaud its removal, many others decry the removal.

I have heard all the arguments for and against its removal and both have their merits. In this article I will like to give an opinion on the issue.

Subsidy refers to a situation where consumers do not pay the full cost of the goods they are consuming but part of the cost is borne by someone else, usually the government. Subsidy is usually applied to help citizens have access to facilities and goods which are neccessities but are unaffordable or to encourage the development or growth of certain industries or sectors. For instance in Nigeria fuel is subsidized. In the pure economic sense subsidies are not the best (in terms of maintaining economic efficiency) but for welfare and development reasons governments’ maintain subsidies in some key sectors of the economy. Subsidies are not meant to last forever. At some point they must be removed. In the case where it exists to enhance the welfare of citizens, as the economic and social welfare of the people improves the subsidies they receive also reduces. Where the subsidy exists to promote the growth of a sector or industry, it is removed once the sector develops to a point where it can begin to compete with other sectors without falling apart. This is a simplistic version of the subsidy theory. The application of this theory is not as straightforward as it sounds.

In the case of Nigeria and fuel government in theory would provide a subsidy on fuel for a period of time and then remove it after putting certain infrastructure in place that would improve the welfare of citizens and enhance the development of the domestic or local petroleum industry. As at today the welfare of the average Nigerian has not improved as majority of the population live on $2 a day and we are still importing refined petroleum products. In spite of this the government still removed the subsidy on fuel. Theory would condemn this removal. But will the reality of what is on ground condemn it?

The issue of fuel subsidy in Nigeria is very complex. There is no straight forward answer to whether its removal is right or wrong. The reality is that the existence of subsidy has been exploited by a group of people as a means of making money. A lot of fraud and corruption takes place when importers claim their subsidy allocation from government. This fraud has robbed the nation. As a result of this, the government decided to remove the subsidy so as to break this ring of corruption and divert the funds towards other developmental activities that would be more beneficial to Nigerians.

Another reality is that the removal of subsidy will result in suffering for Nigerians, giving the prevailing economic and social conditions. Our day to day lives are dependent on fuel. We use it fuel our cars, and public transport vehicles, run our business, power our homes. Fuel is related to every area of our life. That is why it is such a volatile issue, any thing that affects fuel automatically impacts every area of our life. Fuel has a massive “multiplier” effect in the economy. The removal of subsidy will make life much harder for the average Nigerian. However this is a price we must pay for the progress of our nation. According to the government our suffering today will result in huge gains tomorrow. This is perfectly understandable; however I have a problem with the unilateral nature of this sacrifice for our nation’s tomorrow. The masses cannot be the only ones to sacrifice for the good of this nation. The government, as our leaders must also share the pain with us and lead by example. The sacrifices we are being asked to make must also not be in vain. In a bid to save the nations funds they have removed subsidy on fuel, but have still maintained a high level of expenditure on themselves. They are earning exorbitant salaries and allowances which they attempt to increase and at times succeed at increasing yearly. The system of governance is rife with corruption. We live in a country where money allocated to state and local governments for the development of the state are used to line the pockets of officials. Nothing ever reaches the masses, the infrastructure in almost all 36 states since the return to democracy are either non existent or in a deplorable state. The government officials do as they please with state funds and no one says a thing. These are the same individuals that we want to give the “savings” from the subsidy removal and somehow expect them to become responsible with the funds. This is the issue that should be addressed. The problem is not the removal of subsidy but the inequality of the sacrifice. My issue is with the fact that the checks that they have put in place are no different from what has always been in existence and it doesn't look like there will be any constructive use of the "saved" money. I believe the NLC and we as Nigerians should fight the corruption not the policy. Nigerians should hold the government accountable. We must call them to order. They should cut down on their spending , the same we would have to with the subsidy removal; they should have a clear, well defined and specific framework for the use of the saved money from subsidy. Infrastructure that will improve the welfare of the people must be put in place. Infrastructure such as power (which in my opinion is the most critical) , roads, public transport system among others. The burden we are to carry as a result of this decision must not be in vain. We cannot stop one set of people from robbing us blind only to hand the money to another set of people to steal. We must demand integrity from our leaders. We are the people and they have sworn to serve us and we must insist that they do what they promised.

At this junction it must be noted, that the insulting or cursing the president is uncalled for. You may not like him or have voted for him but by virtue of the fact that he occupies the seat of the presidency he deserves our respect. You may criticize but do not abuse or curse. In times of high emotions and frustration we all may have said shameful things about our president but let this stop now. The office of the president deserves honor and respect.

I believe that God has allowed this to come so that Nigerians can begin to take responsibility for their lives and future and realize that we cannot go on like this. That its time we demand integrity from ourselves and the government. It is time we stop playing the victim and claim d victory. It is time for us sacrifice our today for the sake of the next generations tomorrow. This is what we should be fighting for. We should fight for change in the system not for a return to status quo. If the subsidy removal is cancelled we have not changed anything. We have only decided to turn a blind eye tothe rape of our nation. It is time for to decide that status quo is not good enough any more and fight for a genuine change in the way things are done. Nigeria cannot develop without we the people paying a price. Nothing good comes easy; no pain, no gain. So we must be willing to sacrifice however it is our duty to ensure that our sacrifice is not in vain. We must ask questions, be informed about the duties of the government and hold them accountable. Let us not shout in ignorance but let us make well informed criticisms and complaints. This is the war we must wage: the war of accountability and responsibility.

I have a question to ask you dear reader, if you were in a position of authority say senator, president, finance minister or governor; would you be any better. Are you a person of integrity? In all your dealings and endeavors do you maintain a standard of integrity? Or are you just as corrupt as the officials you criticize. In the fight against corruption ensure you fight the corruption within you. The truth is if you replace one corrupt official with another corrupt official nothing will change. Our issues go way beyond mere fuel subsidy. This subsidy issue has just brought our problems to the surface and those are the issues we must tackle. The issues of corruption, unaccountability, irresponsibility, selfishness, nepotism and tribalism to mention but a few. Think and ask yourself are you any better than those in government. In your sphere of influence are you the leader you wish you the leaders in government were.

I learnt something today that refined my perspective radically. Before the Israelites were freed from Egypt, they suffered a lot. In fact they cursed Moses for coming to speak to Pharaoh about setting them free. But that suffering marked the beginning of their liberation. Perhaps this suffering marks the beginning of our liberation from stagnancy and the beginning of our growth. So in all of this let us look to God and ask “Lord is your hand in all this? Lord let your purpose in this situation prevail" Nigeria is on the brink of something great. Ask God to build you up and position you rightly and that you may take your place and play the role God had ordained for you in taking Nigeria closer to her destiny.

Signed

NessaD