It is a known fact that in January 2012 when President Goodluck Jonathan announced the deregulation of the downstream sector, otherwise known as fuel subsidy removal, the same people who opposed the government and organized protests at Ojota, Lagos, Abuja, Minna, Ilorin, and in other parts of Nigeria, even in London, are the same people who have now since returned to the same original arguments about the non-sustainability of the subsidy regime. When they wanted power, they whipped up sentiments against President Jonathan.
At Ojota in Lagos, they carried coffins, they portrayed Jonathan in a derogatory manner, they danced, wore specially made T-shirts, they served jollof rice. They called it “Occupy Nigeria.” The Nigeria Labour Congress and the Trade Union Congress were involved and they had the backing of the opposition. There were casualties.
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The Jonathan administration had proposed a 120% increase in the price of petrol. Hell was let loose. In Ojota, speeches were made by civil society leaders: Pastor Tunde Bakare, Dr. Tunji Braithwaite and a host of others. Many believed that the 2012 “Occupy Nigeria” protest was a major cause of the Jonathan administration’s early loss of goodwill. It was all politics though. But ironically, the same people who turned the matter into partisan politics, upon assumption of power in 2015, started by increasing fuel price from N87 per litre to N145, later to N195 and they met little or no resistance indicating that the crisis of 2012 was indeed stage-managed. It was believed strongly that the former governor of Lagos State, Bola Tinubu and now President of Nigeria sponsored anti-fuel subsidy removal protests in Lagos and elsewhere. He may deny it, but an opinion article he wrote at the time and titled, “Removal of Oil Subsidy: President Jonathan breaks social contract with the people – by Asiwaju Bola Ahmed Tinubu,” betrays any claim of innocence.
Tinubu wrote inter alia as follows: “I am not calling President Jonathan an evil man. I do not believe he is perverse. However, the economic ideas controlling him are so misguided and that they have a perverse impact. Because he is slave to wrong-headed economics, the people will become enslaved to greater misery. This crisis will bear his name and will be his legacy. The people now pay a steep tax for voting him into office. The removal of the subsidy is the Jonathan tax. This situation shows that ideas count more than personalities. People may occupy office but how that person performs depends on the ideas that occupy his mind.”
He added: “Though someday, Nigeria will have to remove the subsidy the time to do it is not now. This subsidy removal is ill-timed and violates the condition precedent necessary before such a decision is made. First, government needs to clean up and throw away the salad of corruption in the NNPC. Then proceed to lay the foundation for a mass transit system in the railways and road network with long term bonds and fully develop the energy sector towards revitalising Nigeria’s economy and easing the burden any subsidy removal may have on the people.”
That was Tinubu on the marble.
Before the Jonathan administration announced any deregulation of the downstream sector, it had set up a verification panel to study and advise the government on the subsidy regime. The team under the auspices of the Ministry of Finance was chaired by Aig Aig-Imoukhuede. The committee reported that the subsidy regime was a big scam, the play-field of rent collectors who submit fraudulent claims to the government and that 21 firms had stolen about N383 billion subsidy money. The proposed deregulation was to check rent-collection, inefficiency, arbitrage and smuggling. For these and other reasons, it was submitted that the subsidy regime was unsustainable. Yet another committee was set up to review the submissions of the Aig-Imoukhuede committee. The same conclusions were reached. Then the government embarked on consultations with a broad spectrum of stakeholders. Ahead of the announcement of the fuel subsidy removal the Jonathan administration also set up a Subsidy Reinvestment Committee and announced palliatives. Key government officials were given time off to travel to their constituencies to explain to the people that the policy would be in the best interest of the poor.
Recently on Channels TV, the form governor of Bauchi State and former minister of Transportation Malam Isah Yuguda who is also a staunch supporter of Tinubu and supported the removal of fuel subsidy said that the fuel subsidy should have gone since 2012. He should know because he was the chairman of the committee that was set up by the Yar’Adua administration to review the subsidy regime and discovered that subsidy was a scam in 2009. But who stopped the subsidy removal by politicizing it in 2012? It was Tinubu, opposition parties and the trade unions.
The problems that could have been solved since 2012 have compounded. It is at this compounded stage that Bola Tinubu on his inauguration as president on May 29, 2023 announced the removal of fuel subsidy without consultations with stakeholders or palliatives for the hardship it causes like Jonathan did in 2012. Neither did he meet the same conditions he gave Jonathan before subsidy could be removed as contained in his aforementioned opinion article. These conditions are: “First, government needs to clean up and throw away the salad of corruption in the NNPC. Then proceed to lay the foundation for a mass transit system in the railways and road network with long term bonds and fully develop the energy sector towards revitalising Nigeria’s economy and easing the burden any subsidy removal may have on the people.” Of course, Tinubu did not meet the conditions he stipulated in 2012 for the removal of subsidy when he gleefully announced the end of subsidy regime on May 29, 2023.
Since the subsidy removal announcement by Tinubu, things have fallen apart in most families living conditions and the centre can no longer hold. Nigerians have watched the fuel expenses for their generators and cars hit the roof, while transportation cost has increased by over 300 per cent. This has had multiplier effect on the prices of goods and services, with inflation which was 22 per cent before the removal of subsidy expected to reach over 30 per cent by the end of July. Remember that inflation rate was 9 per cent when the ruling APC came to power in 2015.
Several universities and other higher institutions across the country had increased their tuition by as much as 100 per cent. President Bola Tinubu’s decision to remove the fuel subsidy has left millions of Nigerians terrified about the knock-on effects that it will have on their daily lives. Many are concerned that they will be unable to meet the costs of education, food and healthcare. The government is yet to suggest any ways to mitigate the impact of this decision for people on low incomes. While all countries are required to eventually remove all fossil fuel subsidies to meet their obligations in the context of the climate crisis, they should not do so in a way that undermines the ability of people on low incomes to secure their right to an adequate standard of living. It is therefore vital that the removal of the subsidy is accompanied by social cushioning and protection measures.
Nigerians should not have to pay the price of decades of political and economic mismanagement of the subsidy scheme. The authorities must finally respond to longstanding demands by civil society and National Assembly to investigate the fuel market chain and hold accountable all those involved in smuggling, hoarding and ‘subsidy scams’ — regardless of rank or status. The Nigerian authorities must urgently put in place measures to protect the rights of people most affected by the removal of the fuel subsidies and prioritize addressing widespread hunger, high unemployment and the rapidly falling standard of living.