Fuel Subsidy: Corruption is the Elephant in the Room

Following the national debate that the recent removal of fuel subsidy by the Federal Government generated, the Network for Democracy and Development (NDD), a civil society organisation, embarked on extensive consultation among its stakeholders across the country. The following communiqué which was issued at the end of the consultation represents our position on the new policy.

*Observations and Issues of Concern:*

1. The decades-long debate about subsidy in the oil industry took a new twist with the decision of the administration of the former President Muhammadu Buhari to discontinue appropriation for fuel subsidy by the end of June 2023.

2. The leading candidates in the last presidential election made removal of fuel subsidy a key component of their manifestoes. However, Nigerians were not provided sufficient information about how the removal of fuel subsidy and its ramifications would be managed if they were given the mandate to lead the country.

3. Subsidy in one form or another is a universal reality. Even in developed economies across the world, essential services are largely subsidised.

4. There seems to be inadequate consultation with stakeholders prior to the declaration of the removal of fuel subsidy as one of the earliest decisions of President Bola Ahmed Tinubu. In the same vein, the root causes of the problem were not addressed while mitigating measures were not articulated.

5. Government narratives tend to criminalise fuel subsidy rather than corruption.

6. Government has not provided empirical data that links the removal of fuel subsidy to improved wellbeing of citizens.

7. NNPCL which is at the heart of the subsidy challenge is now given a lifeline as the saviour.

8. The poverty level in the country is unacceptable. It is a shame that, with more than 130 million Nigerians who are multi-dimensionally poor, nearly 12% of the world population in extreme poverty live in Nigeria.

*Recommendations:*

Against this background, NDD wishes to make the following recommendations:

1. We call on the President to address the primary reason which made fuel subsidy a bitter pill to swallow, namely: corruption.

2. For this reason, we appeal to the President to set up a high-powered panel comprising accomplished and nationally respected professionals to probe the activities of NNPCL and its subsidiaries as well as the Central Bank of Nigeria (CBN) on the alleged mismanagement of the subsidy regime. The probe should revisit past investigations in this regard, especially the Farouk Lawan subsidy panel.

3. In the same vein, the Federal Government should take bold steps to stem other criminal activities that are associated with the oil industry including oil theft, non-functioning refineries, unexecuted turnaround maintenance contracts and smuggling of fuel to neighbouring countries.

4. Government at all levels should work in concert to address in a decisive way the challenge of large-scale poverty in the country.

5. While the government continues to negotiate with organised labour on mitigating measures, steps should be taken to attend to the wellbeing of small businesses and the majority of Nigerians who are not salary earners.

6. It is important that the fund to be saved from the removal of fuel subsidy is judiciously utilised to develop public infrastructure and improve the living condition of the masses.

7. We appeal to public officials at all levels to lead by example by cutting down the cost of governance. At a time like this, those whose decisions would impose an austere lifestyle on the masses should not be seen to live ostentatiously.

8. In order to reduce pressure on fossil fuel, Federal and State Governments should invest more in alternative energy sources that are renewable, eco-friendly and more affordable.

9. Lastly, the Federal Government should be more deliberate and proactive with its management of stakeholder engagement and public communication.

*Commendation:*

1. NDD commends President Bola Ahmed Tinubu for demonstrating capacity as a shrewd negotiator by averting the industrial action that was planned by the organised labour.

2. We equally commend State Governments that have shown compassion in mitigating the effects of the new policy. Special commendation goes to Kwara and Edo State Governments in this regard.

NDD appeals to all Nigerians to join forces with the government as it addresses this nagging national challenge.

Tajudeen Alabede,*

*_National Coordinator_*

Malam Muhammad Jameel Muhammad,*

*_General Secretary_*