THE term “subsidy” was introduced in the 1970s in Nigeria as a scheme to help in the regulation of prices of public goods and services so that people would not be overburdened with crisis of the market forces as the chief determinant for the prices of goods and services of the ideology of free enterprises. There was a global crisis price manipulation with the ideology of free enterprises with market forces as the determinant prices of goods and services.
The then military government promulgated a decree for price control… (Price Control Decree, 1970, No 33)., to regulate the prices of all goods and services including but not limited to the price of fuel/other petroleum products in the country in order to minimise the costly effects of price manipulation of market forces.
“The Structural Adjustment Programme has been an economic policy recommended and directed by the World Bank and the International Monetary Fund, IMF. The conditionalities of the loans taken from either WB or the IMF by the Nigerian government (both civil and military), have always been draconian with systematic name tag, “austerity measures” of which the measures have been deregulation of oil sector, devaluation of Naira and privatisation including sales of public assets and of course forceful revenue generation with sugar coated palliative schemes.”
It Is therefore correct to agree with the proponents of the saying that ” oil subsidy doesn’t exist or oil subsidy payment is a scam”. This is because subsidy as we had then was a scheme for price regulation in order to avert deteriorating crisis of market forces to determine prices of goods and services as at 1970s. Any government claiming to have removed subsidy on oil is acting in antithetical to the PRICE CONTROL DECREE of the 1970 and deliberately further opening door for market manipulation of the prices of oil and allowing the oil sector to be looted and privatised so that the citizens can be can buying at a more outrageous price and this will be a suitable means for the private investors in the oil industry to accumulate wealth indiscriminately.
We must note here that the claim being made by successful governments that they are paying for oil subsidy is not true and it is merely an attempt to loot the national treasury and continue in the neo liberal sales of public assets to their friends and promote the agenda of full privatisation of all the public sectors of the economy. This is currently playing out with the collapse of the four refineries: 2 in Port Harcourt, 1 in Kaduna and 1 in Warri. These refineries are abandoned and looted so that their friends in the private sectors can get hold of the oil sector as private business. We now have before us NNPC limited and Dangote Refinery while Nigerian government failed woefully to maintain the four moribund refineries and even fail to build new ones despite the huge revenue generated from the oil industry since 1960s and use the money to rather import the fuel after it is refined abroad.
The subsidy is diverted from original purpose as a scheme to protect the citizens from market forces manipulation of the free enterprises and used as a means to loot the national treasury.
This does not only happen to oil sector alone but all the sectors of the economy are now in care of the private businesses with price manipulation of market forces and forceful revenue generation via multiple taxation on the Nigerian people.
It is an obvious fact that the current Advisory Council of President Bola Ahmed Tinubu will rerurn Nigeria to the dark days of the Structural Adjustment Programme of the 1980s.
“The previous governments since 1985 have been deregulating the oil sector and partially removing the subsidy on oil with promises that the money saved from removing subsidy on oil will be reinvested back into the economy in meaningful ways such as massive jobs creation and provisions for adequate funding of the education sector, infrastructural development etc even if the fuel price is astronomical after the removal of subsidy on oil.”
The Structural Adjustment Programme has been an economic policy recommended and directed by the World Bank and the International Monetary Fund, IMF. The conditionalities of the loans taken from either WB or the IMF by the Nigerian government (both civil and military), have always been draconian with systematic name tag, “austerity measures” of which the measures have been deregulation of oil sector, devaluation of Naira and privatisation including sales of public assets and of course forceful revenue generation with sugar coated palliative schemes. This dreadful economic policy has never served the interest of the people nor has it boosted or repositioned the economy for progress but rather it has always served the interest of the creditors and neo liberal agenda of privatisation a as whole.
In short, in particular, General Ibrahim Babangida, the Military Head of State in 1986 adopted SAPs to its full scale for economic recovery. For the eight years of his regime Nigeria, witnessed social and economic hardships and devastating financial upheavals. Oil revenues were looted, subsidy in all public goods and services were replaced with market forces as determining factor for price regulation of goods and services and this happened under the watch and supervision of the WB/IMF. In short, the government of General Ibrahim Babangida equally introduced Palliatives as schemes to cushion the terrible effects of allowing market forces, as recommended and directed by the WB and IMF but all these policies fell flat like a house of cards and failed woefully and the Nigerian people were drained economically and financially. This was the genesis of the erosion of the middle class.
The Structural Adjustment Programme was a neo liberal policy recommended by the International Monetary Fund as the condition for the repayment of the loans Nigerian Government took from the World Bank/IMF and further neo liberal economic system of privatising all public goods and services for more wealth accumulation for both local and international multinationals.
SAP is a neo liberal agenda for forceful revenue generation, devaluation of currency and other deregulations and taking off the control of the commanding height of economy away from the government to individual private businesses and multinationals and sales of public assets continue at the detriment of the common good of the citizens.
The previous governments since 1985 have been deregulating the oil sector and partially removing the subsidy on oil with promises that the money saved from removing subsidy on oil will be reinvested back into the economy in meaningful ways such as massive jobs creation and provisions for adequate funding of the education sector, infrastructural development etc even if the fuel price is astronomical after the removal of subsidy on oil. Such evidences could be seen with the SURE-P of the Goodluck Jonathan led government as a promise to cushion the effects of the subsidy partially removed on fuel which failed to lift Nigerians out of turbulent economic hardship.
“Now that the fuel subsidy is fully removed by to the President Bola Ahmed Tinubu-led government and with the promise that N8,000 monthly grant will be paid to 12 million poorest-of-the-poor households and with the same promise that the saved fuel subsidy money will be reinvested back into the economy, it is an obvious fact that the Tinubu-led government is returning Nigeria to the dangerous days of 1986 Structural Adjustment Programme under the supervision of both the World Bank and the International Monetary Fund.”
Christopher Kolade, the former chairman of the SURE-P resigned when he saw that the scheme will not address the purpose of which it was set up because the scheme lacked transparency and credibility. The SURE-P was mandated to reinvest the saved fuel subsidy money to create jobs, build infrastructures and other people’s oriented programmes in order to reduce the tough economic effects on the people after the fuel subsidy removal but to Christopher Kolade, the whole scheme was politicised and became a money making venture for some powerful people in the government of Goodluck Jonathan. ( Daily Post, September 18th, 2015).
The same Palliative scheme was introduced in 2015 under General Muhammadu Buhari when fuel subsidy was also partially removed and the government promised to pay #5000 to 25 millions most vulnerable Nigerians to lift millions of Nigerians out of poverty but the scheme also ended up like SURE-P despite the billions of Naira the regime claimed to have pumped in the scheme.
In 2021 the CSL Stockbrokers, also critized the #5000 grant of the Muhammadu Buhari led government to be paid to poor Nigerians and warned that it will suffer the same fate as the SURE-P. (Punch Newspapers, 28, November, 2021)
Now that the fuel subsidy is fully removed by to the President Bola Ahmed Tinubu-led government and with the promise that N8,000 monthly grant will be paid to 12 million poorest-of-the-poor households and with the same promise that the saved fuel subsidy money will be reinvested back into the economy, it is an obvious fact that the Tinubu-led government is returning Nigeria to the dangerous days of 1986 Structural Adjustment Programme under the supervision of both the World Bank and the International Monetary Fund.
We are evidently beginning to witness the thunderous untold hardships that accompany the economic policy of the new government of President Bola Ahmed Tinubu. The floating of the Naira which is a continuation of its devaluation, removal of subsidy on fuel, educational loan, multiple taxation via forceful revenue generation on public goods and services are characteristics of neoliberal government that will spell doom for the Nigerian people but create more wealth for the multinationals and other private investors.
History is repeating itself in a more cumulatively fold with disastrous effects on the people of Nigeria.
Sodunola, Researcher and Data Analyst, writes from Shagamu, Ogun State.
