- At crossroads of reform, Nigeria grapples with electricity theft, arbitrage
- The ruling class: Symbols of sacrifice or shadows of greed?
In the neon-lit recesses of a mini complex, where the scent of pomade and the gentle hum of blow dryers once filled the air, Francisca Pajok sits quietly in the dimness of her salon.
At 34, she has learnt to twist adversity into a facade of survival. Yet her hands are idle. They aren’t braiding the hair of a client. Instead, they rest, tightly clasped, as though cradling the invisible weight of her sorrow.
Her eyes, etched with the frustration of an idle month, catch the flicker of light from her neighbour’s generator. The electricity supply to their shops was cut off, after a routine check revealed that the metres had been tampered with—and a bypass installed.
What was once a simple thread to the lifeblood of the powergrid had become a secret artery through which Pajok and her neighbours siphoned the energy they could no longer afford to buy.
The electricity bill had soared by over 200 percent, forcing Pajok and others in her complex to turn to this quiet crime. “We had no choice but to do something smart,” she says. “Before, N5,000 worth of units would last us long enough. Now, it burns out in days. We had to survive.”
Survival, however, came at a steep cost. Pajok’s “smart” choice denied Ikeja Electric and the Power Holding Company of Nigeria (PHCN) the revenue they depend on. What she saw as a small, justified theft rippled into larger consequences. Every unmeasured kilowatt-hour drained the company of the funds it needed to maintain and improve the grid. The government, too, lost the taxes embedded in the energy tariffs, taxes that should have flowed into public infrastructure and social services. With every bypass, the nation became poorer, its systems more fragile.
Yet, Pajok sees no wrong in what she has done. Like millions of others, she blames the government for her miseries while quietly absolving herself of responsibility. Her business, though profitable, is unregistered, untaxed. She contributes nothing to the nation’s purse, but she speaks loudly about what the government owes her.
“When people steal electricity, they deny the government the taxes that come with it. This affects reinvestment into public services and further worsens the state of our power grid,” explains Abiodun Fagbohun, electricity investor and prepaid metre dealer. According to him, this act of tampering disrupts not just the flow of electricity but also the delicate balance of economic sustainability.
He says, “It’s a vicious cycle. People bypass because they feel overcharged, but the bypass only leads to poorer services.” In this cycle, Nigeria’s development has been strangled by years of unpaid dues, illegal bypasses, and a populace accustomed to services without the corresponding responsibility.
The Silent Sabotage of Arbitrage: Mohammed’s Fall from Grace
In Agege, where hard currencies whisper the weight of fortune and its decline, Hussein Mohammed watches his empire crumble. He was once a master of the currency game, thriving on the differences between the official and parallel exchange rates. The disparity fed his business, swelling his coffers as he navigated the shadows of Nigeria’s monetary system, arbitraging naira against the dollar with the finesse of a seasoned gambler.
But the tides turned with the floatation of the naira, a bold move by President Bola Tinubu’s administration aimed at bringing transparency and stability to the currency markets. What once was a chasm between the official and parallel markets—a playground for people like Mohammed—shrank to a margin so thin it suffocated his trade. What was once N457 to the dollar in the official market, now fluctuates between N1,630 in the official market and N1,660 in the parallel market offering little more than a sliver of advantage.
“It’s impossible to make any profit now,” Mohammed bemoans. “It used to be instant wealth, but now the difference is nothing.”
The death of his business is not just a personal tragedy; it is a window into a larger economic sickness. For years, currency arbitrage undermined Nigeria’s industrial base. Instead of investing in production and manufacturing, the nation’s resources were drained into speculative currency trading. The wealth Mohammed and his peers amassed came at the cost of real economic growth. Factories closed, supply chains crumbled, and inflation soared, fueled by a cycle of currency devaluation that hollowed out the middle class’s purchasing power.
In the wake of President Bola Tinubu’s reforms, Mohammed and others like him are casualties of a necessary war—a battle to restore sanity to Nigeria’s economy. Yet, as with Pajok, he blames the government for his travails, failing to see the long-term benefits of policies designed to shift Nigeria from a speculative economy to one rooted in real growth.
The Tax Dodger’s Creed
While Pajok stole light and Mohammed traded in shadows, Yele Odugbemi found his rebellion in the silent art of evasion. A retiree turned entrepreneur, Odugbemi runs a small ice factory and a fish farm on the outskirts of Lagos. His profits are steady, his business thriving. Yet, in his world, taxes are not a burden he feels obliged to bear.
“I settle the local government boys with crates of eggs and fingerlings,” he says, his voice tinged with a kind of pride. “Why should I pay taxes when I can take care of them myself?”
Odugbemi’s logic is simple—why pay into a system when that system, in his view, offers nothing in return? It is a sentiment shared by many Nigerians who, like Odugbemi, believe that the government exists to serve them, not the other way around. But in this quiet rebellion lies a deeper problem. The more citizens evade taxes, the more the government is starved of the revenue it needs to function. Every tax dodged is a road left unpaved, a school unfunded, a hospital without medicine.
Odugbemi, like Pajok and Mohammed, sees his actions as justified, even smart. But the cumulative effect of millions of Nigerians avoiding their civic duties is a nation crippled by its own people. The roads that lead to his fish farm are crumbling, the power lines that should supply his ice factory are unreliable. Yet, he cannot see the irony in his complaints.
Entitlement and the Collapse of Governance
The stories of Pajok, Mohammed, and Odugbemi are not isolated. They are threads in a larger tapestry of entitlement that runs through the heart of Nigerian society. It is a sense of deserving without giving, a belief that the nation’s wealth is theirs to take without the corresponding duty to sustain it.
This entitlement mentality is, perhaps, Nigeria’s greatest challenge. It is the belief that government services—electricity, water, good roads—should be available to all, free of charge, regardless of the cost. It is the refusal to acknowledge that these services come at a price, a price that must be paid by every citizen through taxes, through honesty, through sacrifice.
No one can pretend we didn’t see this coming. The signs have been there, obvious as the noonday sun, looming for decades. Many saw it unfold but preferred to shrug it off, imagining that the ship of state was still on course, even as it drifted towards the gorge.
But the worst is here, with us, in real time. The storm we ignored now rages, and no one can say they weren’t warned. We felt the dread in the air. It was palpable, like a suffocating fog clinging to every breath. Even in the so-called “good old days,” there was a foreboding sense that all was not well—that something, someday, had to give.
The decades passed, and with each, we reminisced about an era when life was supposedly better. But the truth is that the good old days have always been a decade away, never in the present.
The Cycle of Evasion: Kicking the Can Down the Road
Each successive government in Nigeria has been guilty of evasion—ducking the hard decisions that could have set the country on a better path. No administration wanted to be the one to impose hardship on the people, lest it lose its grip on public favor. Instead, they kicked the can down the road, leaving the heavy lifting to the next. The result is what we face today: an economy battered by years of neglect and mismanagement, a people teetering on the edge of despair.
There is a bitter reality we must confront: Nigeria is not a wealthy nation. This is not a revelation, but a fact we have refused to accept, to our detriment. Former Director-General of the Budget Office, Ben Akabueze, laid it bare when he compared Nigeria’s meagre budget to those of smaller African nations. South Africa, with a fraction of Nigeria’s population, operates with a budget four times larger.
Worse still, more than 75% of Nigeria’s budget has been swallowed up by recurrent expenditures—salaries and running costs—since 2011. We are bleeding resources that should have been invested in infrastructure and development, feeding a bloated bureaucracy that gives little in return, noted Akabueze.
Illusion of Wealth: A Myth Born in the Flames of Independence
Nigeria’s image as a land of abundance was forged in the fires of independence. Leaders like Nnamdi Azikiwe and General Yakubu Gowon fanned the flames of optimism, promising that Nigeria would rise as an African superpower. The myth of abundance took hold in the public imagination, fueled by the oil boom of the 1970s.
Gowon’s infamous declaration, “Money is not Nigeria’s problem, but how to spend it,” became the mantra of an era drunk on fantasies of wealth. But what was deemed wealth was nothing more than fleeting fortune, a mirage in the desert. The oil that flowed freely, that should have been the nation’s lifeblood, has become the very chain that binds it.
Today, Nigeria is shackled to a dream long past, a skeleton of its former self. The riches we thought would last forever have evaporated, leaving behind a nation that can barely stand under the weight of its own expectations.
Dollars in the Shadows: Betting Against the Naira
As the oil flowed, Nigerians began to hedge their bets—not just on the markets, but against their own country. The locust years of currency arbitrage saw both the wealthy and the struggling middle class speculating on the naira. Nigerians opened domiciliary accounts, converting their earnings into dollars to protect themselves from the inevitable collapse of their national currency. Whenever the naira lost value, these speculators cheered. It was a tragic irony: a people rooting for the decline of their homeland.
State governors, entrusted with public funds, played the same game. Diverting federal allocations and security funds, they bought dollars at subsidised rates from the Central Bank of Nigeria, then sold them at outrageous profits on the parallel market. It was a frenzy that left the economy bleeding.
Economic analyst Tope Fasua sums it up best: When citizens lose faith in their own currency, all is lost. The belief that the naira would fall became a self-fulfilling prophecy. And while the wealthy lined their pockets, the poor were left with nothing but inflation, devaluation, and the slow suffocation of their livelihoods.
Fasua’s analysis pierces through the haze of rhetoric. The man saving $100 a month, seeking refuge in foreign currency, was no different from the politician with $100 million stashed in offshore accounts. Both played the same game, both profited from the naira’s fall—but where one thrived, millions fell deeper into poverty. “In time,” Fasua warns, “the man with the $100 million cannot step out of the house because there are zombies waiting to eat him raw.” The metaphor was stark, but it captured the essence of a nation devouring itself from within.
The warnings came in trickles and vignettes of the worst that could happen crept through the crevices of political and socioeconomic failures but Nigerians thumped each other on the back bellowing through hi-fives and chanting: “What’s the worst that could happen?”
President Bola Tinubu, in his sweeping reforms, is attempting to break this cycle. The removal of the fuel subsidy and the floatation of the naira are not just economic policies—they are attempts to reshape the Nigerian psyche, to teach a nation that nothing in life is free. But for these reforms to succeed, the government must lead by example.
The Ruling Class: Symbols of Sacrifice or Shadows of Greed?
But if Tinubu’s administration is to ask the people to tighten their belts, it must first cut the fat from its own, argue pundits. The outrageously high salaries and allowances of public officials are a stain on any call for sacrifice, according to Cynthia Olubae, a retired school administrator. Indeed, how can the government ask a citizen like Pajok to pay for her electricity when legislators are pocketing millions in allowances? How can it expect Mohammed to accept the naira’s floatation when the ruling class lives in a bubble of privilege, immune to the economic pain they preach about?
For Nigeria to heal, its leaders must first show that they too are willing to bleed.
In July 2024, the House of Representatives resolved to assist the federal government with N648 million for six months by cutting down their salaries by 50 per cent to support food sufficiency and address the high cost of food in the country.
But the Nigeria Labour Congress, NLC, and civil society organisations, CSOs, such as ActionAid, Yiaga Africa, in a swift reaction, said the problem was not with the salaries of members of the House of Representatives, but their allowances, suggesting the bogus allowances be slashed by half to make meaningful impact in their support efforts.
The lawmakers also begged Nigerians to exercise more patience with President Bola Tinubu’s administration in addressing the challenges and hardships faced by citizens.
The House further mandated its committees on appropriation, humanitarian affairs, finance and budget to ensure compliance.
The resolutions followed the adoption of a motion moved on the floor of the House by Ibrahim Isiaka (APC- Ogun State) at plenary in Abuja.
Moving the motion, Isiaka said though Nigerians had the constitutional right to peaceful assembly and protest to address their grievances, the House presented with a humble plea for reason, understanding, and unity in the face of adversity.
The remuneration of politicians has long been a source of public outrage, a glaring testament to the profligacy that has crippled the nation. The salaries and allowances of lawmakers at both the federal and state levels are astronomical, especially when compared to the minimum wage, which barely sustains a living.
In 2024, Nigeria spent N724 billion on its National Assembly and 36 state assemblies, a staggering sum that could have been redirected towards healthcare, education, and infrastructure. And while the Senate President and his colleagues luxuriate in opulence, the citizens they claim to represent languish in poverty.
The solution is clear: Nigeria must reduce the cost of governance.
Nigeria’s Poor, Yet Potentially-Rich State
Nigeria is poor. This truth stings, but it must be faced head-on. Yet, while Nigeria may be poor in current financial terms, it remains rich in potential. It has been this contradiction—rich in promise, poor in performance—that has defined the nation since independence.
In 2021, Nigeria’s tax-to-GDP ratio stood at a meager 6.7%, far below the African average of 15.6%. Even today, as that number inches upward, the gap remains wide. Nigeria is a nation where tax evasion is rampant, even among those who complain the loudest about the government’s failings. This imbalance leaves Nigeria with little choice but to borrow or print money, fueling inflation and deepening the economic crisis.
In 2022, the tax-to-GDP ratio in the European Union stood at 41.2%, with France (48.0%), Belgium (45.6%), and Austria (43.6%) recording the highest shares. If you earned €60,000 in these countries, your tax burden would be €28,800 in France, €27,360 in Belgium, and €26,160 in Austria. In stark contrast, Nigeria’s tax-to-GDP ratio in 2021 was just 6.7%, far below the African average of 15.6%. Though it has risen to 10.6%, the gap remains wide.
This imbalance is worsened by widespread tax evasion, even by those who criticize the government most vocally, as exposed in the Pandora Papers. Nigeria’s oil revenues also pale in comparison to other nations. Saudi Arabia generates $350 billion annually from oil for its 35 million citizens, equating to $10,000 per person. Nigeria, with 220 million people, earns just $36 billion, or $150 per person. Qatar, with a population of 2.6 million, makes $68 billion—over twice Nigeria’s revenue.
Thus, with low tax collection and insufficient oil revenue, Nigeria is left borrowing or printing money, which only fuels inflation.
With such abysmal GDP—barely 10% of it comes from taxes, one of the lowest figures globally. Yet, we expect our government to cradle us like the governments of Western countries, where taxes are the lifeblood of their economies. This expectation, this entitlement, is our Achilles’ heel. Like a child expecting a feast, we do not realise the kitchen is empty.
Despite this, Nigerians cling to the dream of abundance—a dream that has been out of reach for decades. The citizens expect the government to provide the kind of support seen in Western nations, where high taxes fund robust public services. But Nigeria’s tax revenues are among the lowest in the world, and the government cannot give what it does not have.
Read Also: NESG’s Advisory Council to champion economic reforms
Myth of the African Giant: A Hollow Title in the Face of Reality
Nigeria has long been touted as the “Giant of Africa,” a title meant to convey its vast potential, its economic might, and the resilience of its people. But for many Nigerians, particularly the youth, this title rings hollow. The reality on the ground does not match the lofty image of a giant striding confidently across the African continent.
Nigerians like Bodunde Ariyo, who runs a small grocery in Aguda, are living the harsh reality of an economy in decline. Inflation has soared, and with it, the cost of living. Ariyo’s business, like many others, is on the brink of collapse. “Things have gotten really tough,” she admits, her voice laced with the exhaustion of someone who has fought too long against impossible odds.
President Tinubu envisions a thriving SME sector that forms the backbone of Nigeria’s economic future, fostering sustainable development and reducing dependency on oil.
The president has severally highlighted his plans to assist MSMEs to unleash the potential of Nigeria’s entrepreneurial spirit, enabling local businesses to compete on the global stage and contribute meaningfully to the nation’s prosperity.
The future of Nigeria lies not in the grandiose dreams of yesteryear but in the hands of small and medium-sized enterprises (SMEs) like Ariyo’s. SMEs contribute nearly half of Nigeria’s GDP, employ 87.9% of its workforce, and form the backbone of the economy. If Nigeria is to rise again, it will be through the resilience and innovation of its people—through the grocery sellers, the artisans, the tech entrepreneurs who refuse to give up.
Turning the Corner: A Glimmer of Hope in the Face of Reforms
Since May 2023, Nigeria has embarked on a series of long-overdue reforms aimed at stabilizing the economy. The Central Bank of Nigeria has unified exchange rates, fostered a market-determined official rate, and phased out the gasoline subsidy, which had drained over N8.6 trillion from the country’s coffers between 2019 and 2022. These reforms, though painful, were necessary.
Inflation has risen to 33.7%, squeezing the purchasing power of citizens and increasing the cost of living. But these are the short-term costs of the reforms. The long-term goal is to stabilize the economy, create jobs, and foster sustainable growth. To cushion the impact on the poor, the government has launched a cash transfer program, providing N75,000 to 15 million households over three months.
Still, these efforts alone will not be enough. Nigeria needs to accelerate its development progress, not just to stabilize its economy but to address its growing poverty crisis. According to a recent World Bank report, more than 109 million Nigerians now live below the poverty line. This is one of the largest concentrations of poor people in the world.
Embracing New Ways to Move Forward
President Tinubu’s vision of a prosperous Nigeria includes improving mass transportation. To this end, his administration has laid the groundwork for an expansive rail network in cities like Lagos, Abuja, and Port Harcourt. The move towards cleaner energy through CNG buses is also a crucial part of this plan.
Recently, the Federal Government waived Value Added Tax (VAT) and Customs Duties on gas and gas equipment to ensure the success of the CNG initiative.
According to President Tinubu the Compressed Natural Gas Initiative (CNG) that will power the transportation economy will save Nigeria over N2 trillion being used to import Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) into Nigeria. He disclosed that this will free up resources for more investment in healthcare and education.
In December 2023, the Ministry of Finance (MoF) released a Circular on fiscal incentives for the gas sector. This Circular is in line with the Presidential Gas for Growth Initiative which aims to improve the investment climate in Nigeria and to increase the
utilisation and supply of gas in the domestic market.
Against the backdrop of these efforts, the President has appealed to the populace that the measures he is taking are necessary and they should bear with him because they need time to come into fruition. One of them is the CNG programme which is aimed at improving mass transportation. His concept of mass transit is a clear departure from those of IBB and Obasanjo regimes where J5 buses and Keke were the signposts of mass transportation. How many people can these help in a population of more than 200 million? All that has changed to the use of trains and construction of rail lines in Lagos, Abuja, Port Harcourt and elsewhere. The idea should be replicated in other Nigerian cities not necessarily in form of trains but in other capacities that would help transport people en masse.
As Lagos State governor, he had conceptualised the red line and blue line for Lagos but Ambode abandoned it and should not have. He also created special routes for BRT buses; an idea he borrowed from developed countries like the UK and France. He has always had a vision for perfecting a seamless and cheaper run of urban transportation.
There is so much left to be done as Nigeria’s population outgrows its infrastructure. A nation of over 200 million people needs more than token gestures; it requires real, large-scale solutions. The railways and buses that form the backbone of Tinubu’s transportation vision must expand to every corner of the country.
A New Dawn of Responsibility
Yet, beyond the financial numbers, political strategies and socioeconomic upheavals lay a deeper truth. Nigeria’s crisis is not merely economic; it is moral. The wealth funneled into the pockets of the few is often pilfered at the expense of the many, and no number of palliatives or incentives could erase that fundamental injustice. True democracy, after all, does not arise from the ashes of free markets; it must be cultivated in the soil of shared sacrifice.
In the end, Nigeria’s path to salvation lies not in the speculative games of its past nor in the gilded chambers of its legislature. It lies in the hands of its people—those who are willing to stop betting against their own country and start building it anew. For a nation that gambles on its downfall will only ever find ruin. But a nation that stakes its future on the well-being of all its citizens will rise, not through wealth but through a shared belief in something far greater: a future built on hope, sacrifice, and the courage to change.
At the moment, Nigeria stands at the threshold of a new era, one where entitlement must give way to responsibility, where the theft of electricity and the dodging of taxes can no longer be excused as survival strategies.
President Tinubu’s policies, though painful, are the bitter medicine the nation needs perhaps. But for these reforms to take root, both the government and the people must shed the weight of old habits.
The salaries and outrageous benefits earned by public officers must be pruned drastically to reflect the challenges and reality of the country they serve.
The light that Pajok steals is not just electricity—it is the future of the nation. The currency that Mohammed traded in shadows is not just money—it is the potential for growth that was squandered. The taxes Odugbemi evades are not just funds—they are the schools, the roads, the hospitals that could lift the nation from its knees.
Nigeria’s future will not be built on entitlement, but on the hard work of every citizen, paying their dues, owning their responsibilities. Only then can the nation rise from the shadows of its past into the light of a new dawn.