The Other Side Of Fuel Subsidy...

•Continued from page 3 dollar. This, the government felt should go. The twin policy at the same me has led to a sort of reducon in the value of our currency and the exchange rate has gone up thereby exacerba ng our problems. Some call it devalua on. The major economic theory underpinning the current government’s policy is the classical and neo-classical which strongly believe that the market forces (demand and supply) should be allowed to determine the price of fuel. The “invisible hand”, they argue will do it be er whereas economists of the Keynesian theory are of the view that there should be government intervention. Previous governments went the Keynesian way while this government has opted for the classical and neo-classical paradigms. Can our economy be classified as capitalist? if it is, what do we produce apart from the rent we amass from our sole inelas c product of crude oil? At best my descrip on of our economy is pseudocapitalist. If we indeed produce goods as we did in the first republic ll the 70s, this current policy could have suited the direc on taken. If care is not taken the price of a litre which started off at N500 per litre and now at N615 may go as high as N1000 or beyond. This is predicated on the fact that if the price of crude oil goes up in the interna onal market, which is beyond our control, we the end-users will s ll pay more. Some economists have predicted that by the first quarter of 2024, prices will stabilize and the economy would be the greatest beneficiary. This hope and expecta on, good as it is, is subject to other economic variables, “ ie ceteris paribus,” other things being equal.

CURRENT REALITIES

Nigerians are groaning, the price of virtually everything has gone up except like someone jokingly said, salary, allowances, and prerequisite of people in government. And that includes the Presidency down to the councilor and other appointed poli cal office holders. Prices of transport fares, food, school fees across the board, electricity (in plan), house rents etc have all gone up. People point to the fact that outside Nigeria especially in the United States where we copied our system from only the President, Vicepresident, and Chief Jus ce are accommodated at the expense of the state or taxpayers. Besides a reduc on in salary and allowances, I am of the view that items like computers, furniture, cars, etc can be done by leasing. Also, the homogenous money spent on accommoda on money can cease.

The Dangote refinery which we thought would come in handy is not ready going but the informa on in the public space indicates that the produc on may commence in 2025 rather than July/August 2023 earlier projected. The aboli on of subsidies has brought more revenue into the Federa on Account by extension higher revenue to the state governments. However, trust deficit on the part of the people based on past experiences does not give ci zens the confidence that governments will do the right things. Unfortunately for us, many Nigerians are of the view that the parliament that is supposed to scru nize public finance is in cahoots with the execu ve to mismanage the economy. Is the situa on irredeemable?

Certainly not, it only requires commitment on the part of the leadership and support from everyone. On the part of the government, they should come clean to show people the sacrifice they are prepared to make. Refineries should be made to work in the long run with a specific me limit which must not fail. Food security as promised by the president should be vigorously pursued with adequate security provided by the government to ensure that the farmers can access their farmlands unhindered. The interim solu ons like the provision of public buses, fuel allowance for public servants, and public sale of some staple foods announced by some state governments are just temporary measures that cannot last.

At this juncture, I strongly believe that maybe in the interim, a combina on of the neo-classical and Keynesian theories can do the job. We are not capitalist per se where the neo-classical theory can be adopted and the control in the past to has not helped. The floa ng of the naira in such an economy may not serve our peculiarity.

Lessons From The Current Travails

We can make the best out of the current travails by exploring other ways of doing things. For example, experts have suggested that Compressed Natural Gas (CNG) can be used as an alterna ve to PMS. Some people have changed the petrol carburetors in their genera ng sets to that of CNG which according to experts is cheaper and environmental-friendly. We should see the current adversity as a challenge to do things differently rather than see it as a problem to weigh us down. On erra c supply of electricity, we can explore and exploit other opportuni es before it becomes a serious problem. We can do more with proper and effec ve planning.

I humbly submit that a strike may not be the solu on to the challenges at hand but understanding and coopera on.