By Terhemba Tsepav, ACA
The recent removal of fuel subsidy in Nigeria has sparked intense debates and concerns among citizens, both at home and abroad.
As the economic realities of this decision unfold, it becomes crucial to examine the impact on the common man and explore alternative measures to mitigate the hardships faced.
This opinion seeks to provide a comprehensive and professional analysis of the situation.
Note: This is a very long read, but quite interesting so stay with me!
Firstly, I acknowledge the potential benefits of removing the subsidy and redirecting the significant monthly subsidy payments, which amount to over N400 billion (According to NNPCL), towards education and healthcare. However, I believe there are alternative measures that should be considered to lessen the immediate impact on the masses.
One possible approach could involve reducing the cost of governance and implementing luxury taxes, similar to what is done in Asia. By combining these measures with a gradual removal of the subsidy on a diminishing scale, the government can mitigate the adverse effects on the general population.
It's essential to address the fact that the removal of the subsidy has led to a 100% increase in transportation costs and the prices of other essential commodities across the nation, without a corresponding increase in income.
This has placed a significant burden on the common man, particularly in terms of the rising cost of living.
Consider the example of a common man who lives in Lugbe, works in Berger, and earns a minimum wage of 30,000 Naira. Suddenly, they are faced with paying as high as 1,000 Naira for transportation each day, compared to the initial cost of 400 Naira, without any emergency plan for adjustment.
Similarly, consider an NYSC corps member earning 33,000 Naira in a strange land with these increased costs, especially regarding food prices? Furthermore, how will a recent graduate who just secured an entry-level job with a salary of 50,000 Naira cope with the economic realities?
While subsidy removal is necessary to alleviate Nigeria's debt burden, the government should also focus on harnessing other areas of financial leakage and inefficiency to lessen the burden of this impact.
There have been instances of massive confiscation of properties worth billions and trillions of Naira. Various government agencies, such as Customs, JAMB, Ports, Stamp Duties, and the Inland Revenue, have also generated significant revenue ranging in billions and trillions of naira.
Several issues of financial frauds, budget padding and money laundering in MDAs could provide avenues for resource optimization and utilization for this purpose.
Furthermore, it is crucial to also consider a collaborative negotiation approach with the marketers who receive this subsidies.
A lot have been said about these marketers and the politics of the subsidy, however these marketers are not faceless entities; they are mostly Nigerians, and are likely not bigger than the nation, why then is the government scaring away from confronting their excesses to totally pass the brunt to the common man?
I believe these marketers have close ties to those in power or maybe even the power themselves, how then is it this hard to confront the fraud in subsidy and implement the genuine intention for over 46 years?
By fostering a constructive dialogue and developing a detailed framework with a step-by-step implementation plan, a balance can be struck to manage the current hardships faced by citizens.
Now that the subsidy removal has been implemented, what’s the way forward for the common man?
I would like to encourage employers to explore hybrid and remote working options, where feasible, to alleviate the difficulties caused by these harsh economic realities on their employees.
In conclusion, it is crucial to address the adverse effects of subsidy removal while keeping the long-term benefits in mind. By implementing a combination of measures, such as reducing the cost of governance, implementing luxury taxes, and gradually reducing the subsidy, the government can lessen the immediate impact on the masses.
Furthermore, exploring alternative avenues to tackle financial leakage and fostering collaboration with subsidy recipients can contribute to a more balanced and manageable transition.
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