The whole issue of fuel subsidy has come to be perceived as one huge scam the government is not coming clean on. The skewed policy moved the country to near fiscal collapse between 2011 and 2012. Between 2008 and 2010, the federal government paid a total sum of N1.2trillion, an equivalent of $8billion on subsidy at the 2011 exchange rate. The fact of the matter is that subsidy creates soft money for some smart persons and the privileged in the society.
The result is the creation of billionaires that have negligible impact on the economy, because they do not have the capacity to create jobs or employment or add value to production. While they make humongous wealth from subsidy, the rest of society suffers from infrastructural and institutional decay, especially in the social sectors.
The need to do away with subsidy must be obvious to all by now; presently the cost varies with location, going as high as N140 per litre in the southeast and far north. Though there are challenges associated with it, its greatest handicap lies in the lack of trust for the government by the people. So long as government insists on running a closed shop on the issue, so long will there be perpetual suspicion of its policies, no matter how well intended.
We tout the fact that Nigeria is the largest economy in Africa now. It is also the 10th largest oil producer, even though much of it is lost to oil theft and bunkering, which is to say that this giant has not done well for itself. We have lived with economic recklessness and excesses for too long; there is the need for a rethink of the nation’s economic situation. This is the task before the outgoing and incoming ministers of finance and other economic advisers.
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