Sir: In his effort to correct the economic sufferings caused by the wayward policies of the previous administration, President Bola Ahmed Tinubu, is trying to implement economic policies that have long-term impact. This has started with subsidy removal, more government spending, introduction of students’ loan, unification of exchange rate, suspension of taxes on some commodities and services and others. These and many more policies are classical economic policies that have long-run positive impact on the economy. In the long-run, the downturn would be corrected, in which the hardworking would have something to take home.
Without a doubt, the fuel subsidy is a heavy burden to Nigeria’s economy in which some few exploit it to their advantage. Due to the problematic nature of the sudsidy scheme, almost all the previous democratic presidents had promised to remove it at a time, for the same reasons that, it has become a burden to the state, it is riddled with corruption and that only few are enjoying it at the expense of the state, leaving the majority with negative consequences.
However, looking at the current state of the nation’s economy, petroleum subsidy is the only guaranteed general state welfare that will be enjoyed by all and has general impact on the whole population. It has direct linkage to transportation, manufacturing, energy, school fees, prices of foodstuff, services and many more necessities. Any slight impact on the prices of petroleum products leads to inflation, hike in transport fees, jobs cuts and high unemployment prospects.
According to reports, the government has proposed a monthly payment of N8000 allowance to be shared to 12 million households in the country for the duration of six months. Additionally, N100 billion is earmarked for road constructions, several billions for the judiciary, N70 billion for the legislative welfare, while N18 billion is earmarked for the agriculture. These are proposed as remedies to cushion the effect of petroleum products subsidy removal for the time being. No doubt, there are clear misplacements of priorities in this proposal.
If the policymakers are truly desirous of cushioning the effect of the subsidy removal, agricultural sector is the most critical sector that needs urgent intervention to create windows that would encourage farmers to access soft loans, low cost hybrid seeds, subsidized chemicals and fertilizers, and other farming implements. This would allow them the plant with ease, as such, the multiplier effects of that would be: availability of food products in the market and a moderate prices of food items due to the subsidized mechanisms that farmers enjoyed. This would have real positive impact on the live of the common man. But giving out N8,000 to 12 million families could only cushion the instant impact, while leaving them exposed to more suffering and uncertain future on the long-run.
- Muhammad Sagir, Bauchi.