An insight from Princewill ODIDI
Swiping through my LinkedIn notifications I saw this little catchy phrase by Princewill Odidi and I thought it well to share his thoughts on the removal of fuel subsidy, His thoughts are on the bright side you can read through his to see how amazing I find.
”Let me start by saying, looking at it on the surface, it sounds great, but it’s a mistake doing it now.
Come with me let me walk you through.” He said
The point here is that the government spends a significant portion of its budget on subsidizing petrol, which has put a strain on the government finances. In addition, subsidy has led to corruption and inefficiency in the distribution of petrol, as some unscrupulous individuals and companies take advantage of the system to make illicit profits. Several efforts have been made to control the subsidy regime. These efforts have included moves to deregulate the downstream petroleum sector and allow market forces to determine the price of petrol. However, these reforms have been met with resistance from labor unions and other groups who fear that deregulation will lead to higher petrol prices and greater hardship for ordinary Nigerians.
Question: is subsidy really the problem or corruption? If you cut off the hands of a thief, will that stop him from stealing?
Is Nigerias problem budget deficit? If we have surplus budget and more money to spend, will that reduce poverty and improve standard of living? No. Let me explain
Governments can encourage economic growth by investing in infrastructure, education, and healthcare, and by creating a favorable business environment that attracts investment. Second, Education is a crucial factor in improving the standard of living.
Next government need to address income inequality: Income inequality can have a significant impact on the standard of living. Next, Basic needs such as food, water, and shelter are essential for a good standard of living. Governments can ensure access to these basic needs by investing in infrastructure, providing affordable housing, and implementing policies that address poverty and hunger. But listen, the current policy proposal by the new president may fail because the failure of our economy, educational system, infrastructure, healthcare and failing standards of living in Nigeria has little to do with lack of money, Nigerias problem is not lack of money, but lack of discipline, lack of patriotism, most importantly excessive public corruption.
Removal of subsidy should have been done in phases, first, stop corruption, theft wastage, and duplication of budgetary items. Once this is done half of our problems are solved. If more Nigerians move from dire poverty to middle class, subsidy removal will not be felt.
Finally, as a nation, we do not have a social security income distribution network, our over 75 percent downtrodden will be finally buried if the president proceeds with this draculean policy of subsidy removal now. What the new government needs now is to consolidate power, improve on government efficiency in service delivery, tackle corruption in the subsidy regime, improve standard of living, then down the road, gradually subsidy is removed, not all at once but in phases