Speaking at a stakeholders’ dialogue in Akure, Ondo State, the minister said the reforms under the Bola Tinubu administration’s “Renewed Hope” agenda are beginning to deliver early wins: faster GDP growth, easing inflation and a stabilising naira.

What the Government Calls Wins

The minister declared that the removal of petrol subsidies has made Nigeria’s resources “benefiting the many, not the few”.

The reforms are credited with enabling larger investments in direct benefit transfers, student-financing under NELFUND and an ambitious 90,000-kilometre national fibre-optic rollout aimed at expanding digital access.

The World Bank Country Director for Nigeria, Matthew Verghis, described the economy as “at a turning point”, citing signs of macro-stability emerging from the reform package.

Caveats and Unfinished Business

While the broad narrative is positive, both government officials and development partners cautioned that the gains are still early and uneven. Verghis emphasised that “millions of Nigerians are yet to feel the benefits of macroeconomic reforms”.

Also, the reforms have come with political and social cost. The ministerial team conceded that although new tax-legislation efforts have removed or suspended unfriendly levies, such as the five per cent excise tax on airtime and data, they acknowledged that reforms “have come with pains”.

What This Means for Business & Economy

Improved investor sentiment: A stabilising FX market and clearer fiscal direction make Nigeria a more attractive destination for foreign and domestic capital.

More resources for infrastructure and digital-economy investment: Freed-up funds from subsidy removal mean higher potential for growth-oriented spending (e.g., fibre-optic networks, student loans) rather than subsidy maintenance.

Greater accountability and transparency: With the government openly linking reforms to redirected public resources, pressure increases for better tracking, auditing and results-delivery.

Opportunity for tech and fintech firms: Digital access initiatives and regulatory clarity open doors for startups in payments, digital infrastructure, remote-work outsourcing and enterprise tech.

Looking Ahead

• Will the real benefits of these reforms reach everyday Nigerians in living standards, jobs and purchasing power?
• How will the government ensure that savings from subsidy removal are fully invested in economic growth instead of offset by new borrowings or unfunded liabilities?
• As the 2026 tax-law overhaul looms, how will businesses leverage these macro reforms for investment, compliance and growth?

During his first presidential media chat on Monday night, Tinubu said:

“I have no regrets whatever removing subsidies. It was necessary.”

Tinubu expressed confidence in his security architecture, saying he has no reason to sack or probe his security chiefs.

Here are ten (10) key takeaways from President Tinubu’s first Presidential Media Chat:

1. Has no regrets removing subsidy  

Declaring that he had no regrets removing fuel subsidy, he insisted that his controversial tax reforms had come to stay, in spite of opposition from some quarters. Though, he hinted that the government might be open to negotiation on the aspect of the tax reforms dealing with Value Added Tax (VAT).

He said his government’s reforms, though coming with unintended painful consequences, were not intended to inflict pain on Nigerians, but to lead the country to the glorious future that the people crave.

The president blamed palliative organisers for the recent stampedes that caused several deaths in different parts of the country.

Despite spiraling inflation, Tinubu said he did not believe in price controls. He said the market should be supplied, while allowing the forces of demand and supply determine prices.

The president said his administration had met its financial obligations without resorting to the Nigerian National Petroleum Company Limited (NNPCL) for funding.

2. Tinubu says borrowing not a crime

Tinubu defended his government’s huge appetite for loans, saying borrowing for infrastructure is not a crime.

3. No plan to shrink large cabinet

He passed a vote of confidence on his cabinet, and dismissed suggestion to trim the cabinet size.

Speaking to Nigerians as part of his parting shots at the end of the media chat, Tinubu said, “I seek your understanding. I understand the trouble you’ve been through: the economic problems. It is just 18-month that I’ve taken the reign. We’ll maintain focus. Let’s believe in ourselves and in our country. Tomorrow will bring a glorious dawn.”

Tinubu assured Nigerians that 2025 would usher in economic prosperity and growth, emphasising that he understands the plight of the people.

He said, “2025 is a very promising year. Let me thank Nigerians for having confidence in me to be the president of the Federal Republic of Nigeria. I’m very proud of that.

“I don’t want you to think that I will take it for granted at any given time. It is all about service. I will do it with all my heart. I seek your cooperation all the time.”

4. Security | Corruption | Probes

Tinubu told the Presidential Media Chat panel anchored by Dr Reuben Abati of ARISENEWS TV that leaders of the country’s security services deserve commendation, not probe.

He said, “I’m not probing service chiefs. You cannot disrespect the institution because of threat of war, without investment in technology, in weaponry and training.

“There might be leakages here and there. We put a very effective control mechanism in place to monitor our budget releases, and those funds have been judiciously used.

“Consider the welfare of our service men and women, consider it. They are living and are operating in a very serious conditions. We have huge country, a very huge world, and lot of forests, unoccupied spaces.

“Give them credit for what they are doing. I am proud of what they are doing to date. No need to probe. I have confidence in my security architecture. It is very, very unfortunate that, you know, two decades of wanton killing.

“I remember when I jumped into the campaign. I had to stop the campaign to pay condolences to Maiduguri, Katsina, Kaduna, Yola. Today, you can still travel the roads. Before now, it was impossible.

“It takes one incident to mess up an organised environment. It takes one. You cannot say the military is not prepared. When the 9th Brigade Battalion was attacked, you can’t laugh at your nation because of that.

“The enemies, with faith and without, are watching what you are doing. You have to be prepared 100 per cent, 24 hours of the day, to make sure that people are safe.

“Today, that is not the story any longer. People can leave Kaduna and still go towards Kafancha by road. Well, the road may not be that smooth. I’m not saying it won’t. Gradually, we will get there.”

5. Defends Removal of Fuel subsidy 

The president stressed that he had no regrets removing fuel subsidy at his inauguration on May 29, 2023. He said failure to do so would have amounted to the country spending the lives of its future generations.

Tinubu stated, “We were spending our future, We were spending our generations when we claimed we were giving subsidy to Nigerians on petrol. We were not investing.

“We were just deceiving ourselves. That reform (fuel subsidy removal), is necessary. I could see the small glass crashing back. This is the way out. The fact that we give out fuel, allow all the attacks. We cannot spend our future generations’ investment up front.”

Asked if he thought the removal should have been done in phases, Tinubu said it might have worked that way, too.

He stated, “Please, no matter how you cut it or you slice it in segments, you stay out of the middle of the deal. So, cut your coat, stick it to your side. It’s what we have to manage.

“We have no choice but to pull the handbrake. Otherwise, we are headed for slippery slopes. That could result in financial disaster, not just for us, but our children and grandchildren. Where is the inheritance? Where is the pathway to prosperity?”

The president, who cracked a joke about one of his friends who had stopped driving limousine cars since the fuel subsidy was removed, urged Nigerians to live within their means.

6. Insists on Tax reforms 

On the controversial tax bills, Tinubu said, “Tax reform is here to stay. We cannot just continue to do what we were doing yesteryears into this economy. We cannot retool this economy with the old broken boat. I believe I have that capacity (to govern this country). I believe so.

“That’s why I went into the race. I have focus, lots of focus, on what Nigeria needs and what I must do for Nigeria. It’s just not going to be Eldorado for everybody. But the new dawn is here. I’m convinced. You should be convinced. You (the media) should help propagate that conviction.”

7. Claims government meeting obligations without recourse to NNPCL funds 

The president scored his government high with the results already being recorded based on the economic reforms being implemented.

According to him, “When you look at the petroleum revenue, I can tell you, pushed me to my brag mode. In the last three months, I have not taken a penny from the NNPCL before I meet my other obligations.

“That’s excellent. That’s excellent. I repeat, without falling back to the old order, without going into ways and means, I’ve met all obligations.”

He, however, refused to speak on the VAT component of the tax reforms when asked to make some comments on it.

“Why do you want to know that today? Tax matters are subject of debates, reviews, negotiations, not huge concessions. That’s all I’m going to say about that. I don’t mind much energy,” he said.

The president said no amount of time would satisfy the critics, and he needed to take action, nevertheless.

8. Blames organisers for stampedes during palliative/aid distributions in Oyo, Abuja & Anambra 

On the tragic incidents that claimed the lives of many people due to stampedes at the distribution of palliatives by some non-governmental organisations in Oyo Anambra states, and the FCT, Tinubu described the development as sad, and blamed the organisers of the events

He also warned that anyone or group that did not have enough palliatives to give should not call many people to a single place.

Tinubu said, “I’ve never experienced this kind of incident, because you have to organise, you have to discipline, and if you don’t have enough to give, don’t attempt to give or publicise it.

“Every society, even in America, they have food banks; they have hungry people. In Britain, they have food banks, they have warehouses, they are organised, they take time to be on the queue and take turns to collect.

“It’s unfortunate, we just have to learn from our past mistakes. It’s a reflection in our bus stops, where we don’t even want to be on queue before we rush into the vehicle.

“It is very sad, but we continue to learn from our mistakes. To me, I see this as a very grave error on the part of the organisers. However, it doesn’t kill our happiness, but this shouldn’t be.”

Tinubu announced during the Presidential Media Chat that he had reduced debt service from 98 per cent to about 68 per cent and defended the country’s borrowing appetite, arguing that it is not a crime to borrow.

He pointed to ongoing infrastructure project and other investments enabled by borrowing.

The president said he had confidence in his cabinet and would not reduce its size, saying he believes that the ministers are doing what they need to do.

He said his cabinet should be given credit for what it was doing, and there was no need to investigate the members.

Tinubu, who said the country was moving forward despite criticisms from some quarters, described the proposed 2025 appropriation bill as budget of restoration and hope, adding that the country remains on the path of recovery.

He admitted that healing the country was not feasible within a year and asked Nigerians for patience with his government.

Among other things, the president said there was no need to embark on expenditure when revenue remained a challenge, adding that Nigerians must learn to manage in the situation.

9. Insists reforms are necessary for growth 

Explaining that the ongoing reforms were not designed to inflict pains on the people, but “we want this country to grow”, the president stressed the need for the country to produce more for consumption locally, as well as export.

He said improved security would help farmers to return to their farms to boost food production, saying there is need to further encourage the manufacturing of drugs in Nigeria, and put up incentives to harness other potential.

On food security, the president said the country had all it took to turn disaster to prosperity, and all that was needed was to “remove conflicting elements”.

Tinubu said during the Presidential Media Chat there was need to embrace commodity exchange, but he kicked against price control mechanism to rein in inflation, saying he would rather that prices were left to market forces to determine than control them.

10. He doesn’t believe in price control

“I don’t believe in price control. We just need to continue to supply the market,” he said, explaining that demand and supply would eventually reach an equilibrium and find their real bearing.

The announcement, which revealed the financial impact of the subsidy removal, was made by Sunday Dare, the Special Adviser on Media and Public Communications to the President.

In a detailed bulletin outlining Tinubu’s achievements in the oil and gas sector, Dare also revealed that the president had signed five new executive orders aimed at boosting investments in the sector. 

These orders are expected to bring about $2.5 billion in new investments, enhancing the country’s energy policy framework.

Dual Pricing Mechanism Introduced

Among the reforms introduced is a dual pricing structure for petroleum products, allowing differentiation between transportation by trucks and by sea. 

This pricing model is expected to enhance logistics efficiency in the oil and gas supply chain while addressing regional price disparities.

The subsidy removal, announced in Tinubu’s inaugural speech, immediately resulted in a dramatic increase in fuel prices, with petrol prices jumping from ₦180 to approximately ₦620 per litre. 

By 2024, the price at retail filling stations had surged to between ₦1,200 and ₦1,400 per litre, depending on the region.

Economic Impact and Reallocation of Resources

The removal of the subsidy has freed up funds, which the government says can now be redirected toward critical sectors such as education, healthcare, and infrastructure development. However, questions about the effective utilisation of these savings are unanswered.

Finance Minister Wale Edun recently stated that the country has saved up to ₦20 trillion since the deregulation of the downstream sector, although this figure has been met with scepticism. 

It’s been argued that the government’s continued reliance on borrowing—such as a proposed $2.2 billion loan to address the 2024 budget deficit—raises doubts about how effectively the savings are being deployed.

Challenges and Full Deregulation

The transition to a fully deregulated petroleum market came with challenges as petrol prices were initially pegged at ₦620 per litre, with the Nigerian National Petroleum Corporation (NNPC) absorbing the implicit subsidy despite rising crude oil prices and the naira’s devaluation. 

However, mounting debts of approximately $6 billion owed to oil traders forced the NNPC to halt its subsidy mechanism, ensuring full deregulation.

This move has been met with mixed reactions from Nigerians, who face increasing economic stress due to inflation and rising living costs. 

While the government touts the benefits of subsidy removal, including the attraction of foreign direct investments and the stabilisation of the oil and gas sector, many citizens are continuously hit with its immediate economic repercussions.

Despite President Tinubu’s announcement on May 29, 2023, that the fuel subsidy would be removed, the FG spent N3.6 trillion on fuel subsidies in 2023. A draft copy of the Accelerated Stabilization and Advancement Plan (ASAP) presented by the Finance Minister, Wale Edun, showed a projection of N5.4 trillion in subsidy expenditure for 2024.

Leading to talks that a partial subsidy remains despite claims of its removal, this continuation of subsidy spending raises several pressing questions. Firstly, how and why has the subsidy persisted despite the government’s removal? How sustainable is this approach given the already strained national budget? And most importantly, who really benefits from these subsidies, and at what cost to the broader economy?

Fuel subsidy in Nigeria was initially introduced to make fuel affordable for the average Nigerian, instead, it has now been portrayed as a factor eating up the nation’s finances. 

In 2023, the government’s N3.6 trillion expenditure on subsidies represented a moderate portion of the national budget. To put this in perspective, the total federal budget for 2023 was approximately N21 trillion, meaning nearly 17% was allocated to subsidizing fuel.

The projected N5.4 trillion for 2024 leaves us wondering as it points to the escalating cost of maintaining subsidies in the face of global oil price fluctuations and a growing population still facing the brunt of the subsidy removal announced last year. Where did it go?

The discussion surrounding fuel subsidies is not new in Nigeria. Historically, attempts to remove or reduce subsidies have been met with public outcry and protests, often forcing the government to backtrack. The subsidies are seen by many as an essential lifeline in a country where the cost of living is high and many citizens live below the poverty line.

The N5.4 trillion subsidy projection for 2024 brings forth a deep-seated issue within Nigeria’s economic framework, with the difficulty of balancing populist policies with fiscal responsibility. This increase, nearly 50% more than the previous year’s expenditure, points to a factual rise in the financial burden on the government’s budget during a period of high inflation rates and an explosive exchange rate.

The persistence of the fuel subsidy despite announcements of its removal shows a complex interplay of political, economic, and social factors. Many Nigerians view the subsidy as a necessary buffer against the high cost of living. However, it is not understood how fuel subsidy remained a part of government expenditure following its removal from last year till now.

The Minister of Finance, Wale Edun, mentioned that the fuel subsidy removal is an ongoing process and that the government is focusing more on Compressed Natural Gas (CNG) to power the country’s energy needs.

On the other hand, the Nigerian National Petroleum Corporation (NNPC) has insisted that no subsidy is paid to its account from the FG, stating that the company is only recovering the cost of imports.

Conflicting reports about the provision for fuel subsidy in 2024 add to the confusion, with some sources claiming that the FG has not allocated N5.4 trillion for subsidies. This discrepancy raises worries about transparency.

The government is caught in a bind: removing subsidies has led to pain and political backlash, but maintaining them could perpetuate economic inefficiencies and drain public resources.

So that it will not be in the End, what it was in the beginning!!!!!

In his classic, “Coffin For Head of State” released in 1980, in stanza 27 specifically, the late Afro legend, Fela Anikulapokuti, re-echoed “them no want take am (but them take am), them no want take take am (but them take am), Who go want take coffin? (but them take am), he rounded off that stanza saying, them must take am (but them take am). 

We compare the back and front argument on the fuel subsidy removal scenario and its attendant hullabaloo revolving around it, in which the masses seem to have been confused and the leadership of the country gives justifiable explanations.   

But just like the good book, rightly noted, “No test or temptation that comes your way is beyond the course of what others have had to face”. As such, ours (Nigeria) is not a close case as a nation, the prevailing challenges notwithstanding. 

America, which we all envy today as the zenith of democracy and a role model of development, became the world’s leading industrial power in the 20th century, of course through the instrumentation of entrepreneurship, and industrialization among other conscious steps it had to take. 

Again, it took Leek Kwan Yew 25 committed years to transform the country from a tiny colonial outpost into a thriving, global economic centre, specifically from a Per capita GNP of $920 in 1965 to $23,300 in 2000. However and succinctly put, we must quickly and honestly get to serious work to get the good result we desire as a  people. 

The above optimism and positivism, viz-a-viz an x-ray of the real situation we are enmeshed in, will form the crux of the following discussion.   

1. Removing Subsidy is not bad in and of itself.   

The only place to start, and start well, is the beginning. That is an overview of the pros/cons of the subject matter of the removal of fuel subsidy. From the positive dimension, the fuel subsidy removal, if properly implemented, would free up financial resources for other sectors of the economy, incentive domestic refineries to produce more petroleum products, reduce Nigeria’s dependence on imported fuel, increase employment, channel funds for the development of critical infrastructure, reduce Nigeria’s dependence on imported fuel, reduce the budget deficit and generate a budget surplus shortly.

Again, its “twin brother policy,” the floating of the  Naira will also among others; improve Foreign exchange reserves, increase investors’ Confidence, facilitate a better balance of trade, reduce dependence on oil revenue, promote economic stability, decrease foreign investment and decrease Government revenue. 

These two policies, introduced almost immediately or simultaneously are at best, in the interest of the larger society and targeted at revamping the economy. 

However, there seems to be a vacuum in the implementation of the policies and it seems to be that putting two-edged swords in at the same time really hit hard on the masses, of which the society is yet to recover from its effects.

For instance, there are several countries which have instituted these types of reforms with some appreciable level of success. However, such countries often base their decision on strong research/social and political analysis; cash or in-kind transfers to cushion the impact on the poor; policy coherence, a phased approach; attention to public trust; public campaigns; and persistence and adaptability that keeps in mind the key objectives.  

Majorly independent research is conducted early on, which can quantify the level of subsidy, and assess distribution of its costs and benefits-in-kind processes. 

Of the above-mentioned, only cash transfers can be said to have been observed and seen in Nigerian society, other practical steps seem to be evading, or not have been observed,  the effects of which have not been kind to the masses. 

Thus, we recommend that the government goes back to the drawing board if possible for a “policy damage control” so that society can enjoy the benefits of what the policy intends to achieve.   

2. The Government Should Invest in a Knowledge Economy.   

Also cardinal to our subject of discussion is the need for the government to look beyond the traditional way of generating revenue and invest in the Knowledge Economy. 

Anytime the subject matter of removal of fuel subsidy suffices, the question that readily comes to mind is,  is petroleum the only route to earn foreign currencies? What is the contribution of this sector to the economy? It will amaze you to know that the Oil sector contributed 6.63% to the total real GDP in Q1 2022, down from the figures recorded in the corresponding period of 2021 and up compared to the preceding quarter, where it contributed 9.25% and 5.19% respectively.  

According to Statista, in the second quarter of 2023, the contribution of the oil sector to the country’s GDP reached 5.34 percent. Meanwhile, the Nigerian Bureau of Statistics (NBSS), note that the top ten sectors contributing massively to Nigeria’s GDP are: Agriculture, 21.07% Information and communication, 17.89%, Trade and Manufacturing 15.7%, Finance and insurance 6.8%,  Mining and Quarrying, 6.4%, Oil sector 6.385,  Real Estate 5.20%, Construction 4.22%, Professional 3.195 and other services 2.51%. The above data speak for itself, as challenging as the Agricultural sector is,  it’s leading and providing ample source of finance for the country.   

However, and beyond the above, the government must look towards investment in the knowledge economy and it must do so with zeal, zest, and all seriousness. The Knowledge economy, or knowledge-based economy, is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific innovation.

In the knowledge economy, products, and services that are based on intellectual expertise advance technical and scientific fields, and innovation. 

According to the World Bank, knowledge economies are premised on four pillars which are; Institutional structures that provide incentives for entrepreneurship and the use of knowledge, Availability of skilled labour and a good education system.

Others are; access to information and communication technology infrastructures and a vibrant innovation landscape that includes academia, the private sector, and civil society. The worldwide examples of the developing knowledge economy include information technology in Silicon Valley, United States; aerospace and automotive engineering in Munich, Germany; biotechnology in Hyderabad, India; electronic and digital media in Seoul, South Korea; petrochemical and energy industry in Brazil among others.  

Amazingly, the richest people in the world today hardly deal in the oil sector. Oil and gas is vast, becoming a curse to us rather than a blessing. Resource course theory was propounded by Richard Auty in 1993, where he used the term resource course to describe how countries rich in mineral resources were unable to use that wealth to boost their economies and how, counter intuitively, these countries had lower economic growth than countries without an abundance. 

For records, Elon Musk, with networth of $203 billion, owns App X formerly Twitter, and Tesla among others, Jeff Bezos deals majorly deals in Amazon and was said to have worth $199 billion, while, Mark Zuckerberg, with the networth of $166 billion, chairs the Meta platform. What more? Apple Incorporation is not an Oil and Gas firm but is economically stronger than any country on the African continent, which should give us a clue that the knowledge-driven economy is worth giving attention to as a nation. Lets implore!

3. Consistency in Government Policies.   

To drive home the importance of consistency, the ancient wisdom of the late Dr. Martin Luther King Jr. suffices, according to him, “If you can’t fly, then run,  if you can’t run, then walk, if you can’t walk, then crawl, but whatever you do, you have to keep moving.” 

What does this imply? The government has to be consistent with its policies and must be sure that such policy(ies) resonate with the situation of the people.  The four phases of policymaking are clear, however for emphasis, it involves but is not limited to: problem identification, policy formulation, decision-making and evaluation. 

While we are convinced that this government is blessed with “think thanks”, who can think with and arrive at a laudable solution on its behalf,  the attendant results of the policies churned out over time seem to be out to test run and not have come to stay. 

Thus we recommend extensive consultations with the masses, professional bodies that would give the true picture of what the policies or policy could achieve and why preempting what could go wrong. 

For a nation of over 60 years of age, we should not be found doing ‘test and error” as a nation, by now we should be clear-cut and lucidly clear about what we intend to achieve and go ahead to take practical, well-thought-out steps to make it happen. 

A statement by Bayo Onanuga, special adviser to President Bola Tinubu on Information and Strategy: reads,

“The attention of the Presidency has been drawn to two fiscal policy documents in circulation that are being given wide coverage by the mainstream media and social media platforms.

“One of the documents titled Inflation Reduction and Price Stability (Fiscal Policy Measure etc) Order 2024 is being shared as if it were an executive order signed by President Bola Ahmed Tinubu.

“The other is a 65-page draft document with the title ‘Accelerated Stabilisation and Advancement Plan (ASAP)’, which contains suggestions on how to improve the Nigerian economy. President Tinubu received a copy of the draft on Tuesday.

“We urge the public and the media to disregard the two documents and cease further discussions on them. None is an approved official document of the Federal Government of Nigeria. They are all policy proposals that are still subject to reviews at the highest level of government. Indeed, one has ‘draft’ clearly written on it.”

According to the Coordinating Minister of the Economy, Mr. Wale Edun, ‘It is important to understand that policymaking is an iterative process involving multiple drafts and discussions before any document is finalised.’

“We assure the public that the official position on the documents will be made available after comprehensive reviews and approvals are completed.”

Emanating from the two documents have been reports second-guessing government’s policy on customs tariffs, fuel subsidy and other economic matters.

“The government wants to restate that its position on fuel subsidy has not changed from what President Bola Ahmed Tinubu declared on 29 May 2023. The fuel subsidy regime has ended. There is no N5.4 trillion being provisioned for it in 2024, as being widely speculated and discussed,” Edun stated.

The Coordinating Minister of the Economy further clarified: “As previously stated by government officials, including myself, President Tinubu announced the end of the fuel subsidy program last year, and this policy remains firmly in place.

“The Federal Government is committed to mitigating the effects of this removal and easing the cost of living pressures on Nigerians.

“Our strategy focuses on addressing key factors such as food inflation, which is significantly impacted by transport costs. With the implementation of our CNG initiative, which aims to displace high PMS and AGO costs, we expect to further reduce these costs.

“Our commitment to ending unproductive subsidies is steadfast, as is our dedication to supporting our most vulnerable populations”.

We call on the media to always exercise necessary checks and restraints in the use of documents that do not emanate from official channels so that the members of the public are properly informed, guided and educated on government policies and programmes.

This, he said at the ongoing World Economic Forum in Riyadh, Saudi Arabia, where he was one of the panellists. 

The issue of fuel subsidy removal has obvious impacts on citizens. While the long-term benefits of a healthier economy are undoubted, the immediate challenges require careful consideration.

I’m sure several people are having similar thoughts as I am — the negative outweighs the positive right now, will the table ever turn?

Over the past 18 years, Nigeria has spent more than $30 billion on fuel subsidies. This expenditure has impacted funding for areas like education, healthcare, and infrastructure. 

While the intention was to ease the burden on the population, statistics show that wealthier households actually benefit more from these subsidies due to higher fuel consumption. This means the government is spending money that could be better targeted to support low-income Nigerians.

But then again, the recent price increase has impacted Nigerians, particularly those living in poverty — approximately 133 million. Transportation expenses, a major strain on low-income budgets, have risen sharply. This has limited access to work, healthcare, and essential services, further worsening their situation.

Here’s something else the President said that got me pondering over the economic hardship hindering several youths despite being ‘vibrant’ and ‘ready for technology’:  “Luckily, we have a very vibrant youthful population interested in discoveries by themselves and they are highly ready for technology, good education committed to growth. We are able to manage that and partition the economic drawback and the fallout of subsidy removal.”

Yes, there are free training made available, but the factors that limit vibrant youth despite being ready to take hold of their future are numerous. 

The two major issues are unstable electricity supply, which can disrupt online learning as well as working, and limited access to affordable internet hindering access to educational resources and connecting with mentors or collaborators. 

Let’s not forget the high costs for those without access to free training — even some free training are paid for when it comes to the advanced or pro learning.

Transportation expenses, a significant chunk of a low-income household’s budget, have risen so steeply, leading to difficulty getting to work, limitations on accessing essential healthcare services, and even challenges running everyday errands. 

The impact doesn’t stop there because fuel is the lifeblood of transporting goods across the country. With its price increase, a domino effect takes hold. Food, medicine, and other necessities have become more expensive, further squeezing already limited household budgets. 

The situation becomes even more concerning if the freed-up funds from subsidy removal aren’t efficiently directed towards social programs that could act as a buffer for the poor during this economic transition.

Though the President admitted that the hallmark of leadership involves taking difficult decisions at the time it ought to be taken decisively, and highlighting the awareness of the vulnerable being affected, the issue remains worrisome.

Not to be one-sided, let’s see how fuel subsidy drains the national budget:

Reduced government revenue: When the government sells fuel below market price, it forgoes the potential tax revenue it could collect on those sales. 

This reduces the amount of money available for funding public services like education, healthcare, and infrastructure.

Higher budget deficits: The cost of subsidizing fuel can create a budget deficit, where spending exceeds revenue. This can lead to increased government borrowing, which can burden the economy in the long term.

Inefficient allocation of resources: Subsidies often benefit wealthier households more than poorer ones, as wealthier households tend to consume more fuel. This means that the government is spending money that could be better targeted to help low-income Nigerians.

Discourages investment in renewable energy: In keeping fuel prices artificially low, subsidies discourage investment in renewable energy sources like solar or wind power. This can slow down the country’s progress towards a more sustainable energy future.

So, the big question is — How can Nigeria find a balance? 

Tinubu said that the removal of fuel subsidy has undeniably reinforced accountability, transparency, and physical discipline for the entire nation. We hope to get a clearer view of this. 

He strongly believes that it is important to prioritize the direction in which the country should move forward.

In my opinion one of the ways to move forward is filling the missing gap:

1. Targeted Social Safety Nets

This could include subsidized public transportation for low-income individuals, but right now, even the train is not cheap.

2. Progressive Taxation

Enhance progressive taxation measures to ensure that the burden of funding essential services and programs does not disproportionately fall on the poor. 

Implementing fair and equitable tax policies can help generate revenue while minimizing the impact on those with lower incomes.

3. Efficiency in Government Spending

Improve transparency and efficiency in government spending to optimize the allocation of resources. In reducing wastage and corruption, more funds can be directed towards social programs aimed at mitigating the impact of subsidy removal.

4. Investment in Infrastructure

Channel savings from fuel subsidy removal towards investments in infrastructure such as healthcare, education, and public transportation. 

Improving infrastructure can enhance overall economic productivity and create employment opportunities, benefiting all segments of society.

5. Diversification of Revenue Sources 

Come up with alternative revenue sources beyond oil exports to reduce dependency on volatile commodity prices. 

Developing non-oil sectors such as agriculture, manufacturing, and technology can generate sustainable revenue streams and reduce fiscal vulnerability.

6. Consultation and Stakeholder Engagement 

Facilitate inclusive dialogue with civil society organizations, community leaders, and affected stakeholders to better understand the diverse impacts of subsidy removal. 

Engaging with stakeholders can inform policy decisions and ensure that interventions are directed to meet specific needs.

7. Long-term Economic Planning

Adopt a comprehensive long-term economic strategy that balances fiscal discipline with social inclusion. 

Setting objectives and potential achievements can guide policy implementation and ensure sustained progress towards economic stability and poverty alleviation.

Need I say more? Let’s hear from you!

The Nigerian economy has been subsided in various ways for many years and this includes fuel, education, electricity, forex etc.

Fuel subsidies began in the 1970s and became institutionalised in 1977, following the promulgation of the Price Control Act which made it illegal for some products (including petrol) to be sold above the regulated price.

While the concept of subsidy itself is noble, its administration in Nigeria has been plagued with serious allegations of corruption and mismanagement.

In June 2022, the Managing Director of NNPC Limited indicated that daily consumption of PMS had increased to over 103 million litres per day and that at least 58 million litres were being smuggled.

This means that smugglers and other West African countries benefit more from fuel subsidy than Nigerians.

Trillions of dollars have been spent to subsidize fuel import including crude swap deals.

On his inauguration on May 29, 2023, President Bola Tinubu announced that ‘Fuel Subsidy is gone’. This announcement by the President has spiral to several economic shocks.

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The President’s speech outlined bold policy measures aimed at addressing long standing issues, with a focus on ending the fuel subsidy and tackling multiple exchange rates, among other crucial reforms.

The Fuel Subsidy Conundrum

President Tinubu emphasized that the fuel subsidy had outlived its usefulness, costing the nation trillions of Naira yearly. He highlighted that redirecting this massive sum towards public transportation, healthcare, education, housing, and national security would create a more equitable and productive economy. The President was unequivocal in denouncing the undue influence of powerful, unelected groups that had benefited from the subsidy for years.

Business-Friendly Reforms

President Tinubu’s administration is keen on promoting a business-friendly environment to stimulate economic growth. Through the implementation of Executive Orders aimed at easing fiscal policies and suspending multiple taxes, businesses in the manufacturing sector will receive the necessary buffers and headroom to expand. The move seeks to create more job opportunities, attract investments, and improve the overall competitiveness of Nigerian businesses on the global stage.

The Currency Exchange Rate Reforms

Another pressing issue addressed by the President was the multiple exchange rate system, which had facilitated currency speculation and diverted funds from job creation and business development. By streamlining the exchange rate system, President Tinubu aims to promote fair and inclusive economic growth, benefitting a broader segment of the population.

Reforms for Economic Empowerment; Empowering MSMEs and Startups:

In line with his commitment to long-term economic improvement, President Tinubu unveiled several measures to empower businesses, the working class, and vulnerable citizens. The Executive Orders signed earlier this month aim to ease the tax burden on businesses and create a more favorable business environment. 

Recognizing the pivotal role played by micro, small, and medium-sized enterprises (MSMEs) in the Nigerian economy, President Tinubu announced a series of targeted initiatives to energize this crucial sector. A sum of N125 billion has been allocated to empower nano businesses, with conditional grants provided to one million nano business owners across the 774 local governments. Additionally, N75 billion will be dedicated to supporting 100,000 MSMEs and startups, providing them with access to affordable credit and fostering entrepreneurship and innovation.

Focus on Agriculture and Food Security

Recognizing the critical role of agriculture in driving growth, President Tinubu announced a comprehensive plan to ensure food affordability and availability. The release of 200,000 Metric Tonnes of grains from strategic reserves and the provision of 225,000 metric tonnes of fertilizer and seedlings to committed farmers demonstrate the government’s dedication to food security. The cultivation of 500,000 hectares of farmland for rice, maize, wheat, and cassava further underscores the administration’s commitment to bolstering the agricultural sector.

Leveraging Technology and Innovation

The President’s vision also emphasizes the role of technology and innovation in propelling the Nigerian economy forward. By promoting investment in advanced sectors like artificial intelligence, robotics, and deep tech, the administration aims to drive sustainable economic growth and create a digitally inclusive society. Partnerships with leading global technology companies are expected to facilitate the adoption of cutting-edge technologies, making Nigerian businesses more competitive in the digital era.

Conclusion

President Tinubu’s speech laid out a robust agenda to tackle Nigeria’s economic challenges and promote sustainable growth. The proposed reforms, including the end of the fuel subsidy and currency exchange rate streamlining, demonstrate a commitment to creating a fair, equitable, and thriving economy. 

With a focus on empowering businesses, supporting agriculture, and providing financial assistance to MSMEs and startups, the President’s vision aims to uplift citizens across socio-economic brackets and foster a prosperous future for the nation.

In turn, rates of expansion in output and new orders softened but remained marked nonetheless. Business confidence dipped to a near-record low. 

Intensifying inflationary pressures encouraged companies to expand inventories to try and get ahead of further price increases.

Meanwhile, employment was up modestly for the second month running. The headline figure derived from the survey is the Stanbic IBTC Purchasing Managers’ Index (PMI).

Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration. 

The headline PMI remained above the 50.0 no-change mark in June.

Although dipping slightly to 53.2 from 54.0 in May, the reading signaled a solid monthly improvement in the health of the private sector. 

While overall business conditions remained on a positive trajectory, firms faced a much stronger inflationary environment at the end of the second quarter of the year, linked to the removal of the fuel subsidy. 

Purchase prices increased at the fastest pace since last August, while the rate of selling price inflation accelerated sharply to the steepest in the year-to-date as firms passed higher costs on to their customers. 

Issues around the ending of the fuel subsidy also acted to limit the pace of output growth, according to respondents, although activity was still up markedly in the latest survey period.

Output has now risen in each of the past three months amid higher customer numbers and growth of new orders. Wholesale & retail bucked the wider trend and posted a drop  in activity. New business was also up for the third successive month. 

The rate of expansion was marked, albeit the softest in the current sequence of growth. Higher new orders encouraged firms to expand employment for the second month running, although the pace of job creation was again only modest.

Despite increasing staffing levels, firms recorded a build-up of backlogs of work, due to an expansion in new business and some difficulties securing inputs.

Some companies reported having brought forward purchasing and expanded inventories ahead of predicted increases in the costs of materials in the months ahead.

This, allied with increasing workloads, meant that stocks of purchases were accumulated to the largest degree in eight months. Business confidence dropped to the second-lowest on record in June and was only fractionally above last November’s nadir.

Companies remained optimistic that output will increase over the coming year, however, linked to investment, business expansion plans, and proposed marketing drives.

Approximately 7,000 employees will benefit from this initiative, with junior staff receiving a 25 percent salary increase and senior staff receiving a 12.5 percent increase.

The bank aims to enhance productivity and help its staff cope with the challenges posed by rising fuel, electricity, and other prices.

According to Oluremi Akande, the Head of Marketing and Communications at LAPO Microfinance Bank, the salary increase is one of several measures implemented by the bank to support its staff during these difficult economic times.

The bank remains optimistic about the improvement of the current economic conditions and is committed to employing superior strategies to ensure business continuity and sustainability for the benefit of all stakeholders.

LAPO Microfinance Bank has a strong institutional culture that values excellence and service. In the previous year (2021-2022), over 900 staff members were promoted to different ranks within the institution.

The bank also holds the annual LAPO Staff Meritorious and Long Service Awards to recognize and reward outstanding and loyal employees.

Staff welfare remains a top priority, and the bank is committed to implementing strategies that support this objective.

In 2021, LAPO Microfinance Bank was ranked as the fifth largest employer of labor in Nigeria by StatiSense.

The bank has been dedicated to its mandate of socio-economic empowerment for over 30 years, focusing on assisting low-income households and micro, small, and medium enterprises in Nigeria