Subsidy removal: Threat before investment amidst controversies

Policy somersault within the diction of Nigeria’s administrative concept has been a phenomenon of note. At critical times, the socio-economic and political fabrics of the Country are known to have suffered, at some points, from the collision of contrasting policies. Some of these have been laid on the ground of inconsistencies in the policies of government over time. The narratives of changes in policy direction have been known to be well pronounced with change in government, which usually see one administration jettisoning the policy track of a previous government, while repositioning the track in another dimension.

At critical point, such disposition to administration has seen the total abandonment and crumbling of the track of evolving development from a particularly policy, owing to perceived lack of interest from a successive administration. This has been very pronounced with change in the ruling party, when a government coming into power is structured on a party platform different from the previous. Over the years, situations have borne narratives unbecoming of policies introduced and fixed for implementation with the commitment of enormous resources being swept aside by a new government. This is not, however, to say the disposition is only reduced to differences along party lines, as experiences have also shown a successive government on the same party platform with a previous one  exhibiting such syndrome.

However, while policy somersault is largely known to suffer its evolution by change in government, it becomes more mind-boggling when such takes face within the period of just one same administration in power. The issues graduate to become more controversial when, particularly, policies are shrouded with controversies owing to dichotomous layers of orders from spheres of relevant offices within the same administration. Such only puts the people in the dark with misrepresentation of facts, and thus yielding uncertainties and speculations unhealthy for the polity and, most particularly, the economy. Recently, controversies over the decision of the Federal Government to remove petrol subsidy has been a topical issue over layers of contrasting intentions of the Government.  As pressure mounts with the threats to greet the planned removal of subsidy by the Federal Government with nationwide demonstrations, a new controversy  erupted on Tuesday when the Senate President, Ahmad Lawan said President Muhammadu Buhari has not given any one the directive to effect the removal of subsidy in the Country. Lawan who paid a visit to President Buhari on Tuesday following the heat gathering around the speculated removal of subsidy as announced by critical stakeholders from the President’s cabinet, affirmed to Nigerians that the President has not directed anyone to remove subsidy. Lawan had said the meeting with the President was borne out of the need as legislators to heed the outcry of constituents which they represent as lawmakers. He mentioned to State House Correspondents after the meeting which held behind closed doors with President Buhari at the Presidential Villa, Abuja, that the lawmakers were worried about the rousing agitations across the Country, mentioning that in the aftermath of the discussion with the President, he was glad to inform Nigerians that Buhari “never told anyone that the petroleum subsidy should be removed.”

“Well, it will be of interest to Nigerians to hear what I’ve come to discuss with Mr. President among several other things. Many of us are very concerned with the recent agitations, protests, and many citizens were so concerned. Our constituents across the Country are very concerned that the Federal Government will remove the petroleum subsidy. And for us, as parliamentarians, as legislators representing the people of Nigeria, this must be of interest to us. And we’ve just finished our recess; we had gone home to our constituencies and senatorial districts and we feel the pulse of our people. And I found it necessary to visit Mr. President, as the leader of our government and our leader in the Country, to discuss this particular issue of concern to Nigerians, and I’m happy to inform Nigerians that Mr. President never told anyone that the petroleum subsidy should be removed,” he was quoted.

The development came eight days from the planned protest rallies of the Nigerian Labour Congress (NLC) set for Thursday 27th January across the 36 States in the Federation and 13 days from a national NLC protest slated for Monday, February 01, 2022 in Abuja, against the noised subsidy removal. Recall that FG had said it would remove the fuel subsidy this year following advice by the International Monetary Fund (IMF), and the World Bank. It would be recalled that the Minister of Finance, Budget and National Planning, Dr Zainab Ahmed, had last October, 2021, announced that the Federal Government made provision for petrol subsidy only for the first six months of 2022 as the government looked towards complete deregulation of the sector.

The Minister had said, “In our 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry.” In its place, the Minister of Finance, Mrs. Zainab Ahmed, had said about 40 million poor Nigerians would be paid a N5,000 monthly stipend for transportation.

The announcement of subsidy removal had sent fear down the spine of many; a development that has attracted the attention of Labour and Civil Society Organisations with flags of intended protests, should the policy be brought forward. Recall that in reaction, the organised labour through the leadership of the NLC had directed all its state councils to mobilise members for one day nationwide protest in the 36 States of the Federation against the planned subsidy removal on petroleum and the imposed tax on soft drinks deregulation on January 27, 2022.

The Congress had said the planned rallies would commence without warning should the FG announce new fuel prices ahead of scheduled protest rallies in all the States of the Federation. The protest is slated for January 27, 2022, and would culminate in the submission of protest letters to all the 36 state governors. Subsequently, the NLC had said a national protest would also hold in Abuja on February 1. These were part of the resolutions of the National Executive Council meeting of the NLC which was held at the Labour House, Abuja, on Friday, 27th December, 2021.

The Union had submitted that the price of petrol and other refined petroleum products would continue to rise beyond the reach of average Nigerian workers and citizens as long as the price of refined petroleum products is based on importation pricing template, which is heavily dependent on a volatile foreign exchange rate heavily skewed against the Naira. This, it noted, informed the position of the Congress to reject an incessant increase in the pump price of petrol which is usually disguised as deregulation or removal of fuel subsidy.

A communique signed by the NLC President, Ayuba Wabba and the General Secretary, Emmanuel Ugboaja, had submitted that: “The NEC, therefore, resolved to reject and resist the planned increase in the pump price of petrol by the Federal Government as it described it as extremely insensitive to the acute hardship being experienced by Nigerian workers and people; That government should promote local capacity to refine petroleum products for domestic use; Pursuant to its rejection and resistance of further increase in the price of petrol, to organise protest rallies in all the 36 states of the federation on January 27, 2022 which would culminate in the submission of protest letters to all the 36 state governors. Subsequently, a national protest will take place on February 1, 2022 in Abuja; and in case government decides to announce new petrol prices before the proposed protests, the protest will kick off instantly and without any other further notice in every state of the federation and the Federal Capital Territory.”

Such controversies and inconsistencies misrepresenting the direction of the Government on critical matters of the  economy largely threaten investors who would always sniff for environment that are economically stable and coordinated.  Having such non-uniform positions sending strokes of misrepresentation to the public would only make the confidence of investors shaky and, as a result, a red signal against committing huge investment in the Country. In the long run, the debilitated economy would further suffer. It behooves the Federal Government to clear the air on the clear cut direction of its policy on petrol subsidy to eliminate the cloggings of controversies leaving suspense in the air.