BRING BACK THE FUEL SUBSIDYNIGERIA MUST PUT THE WELFARE OF IT'S CITIZENS BEFORE ECONOMIC DOGMA.

 (A critical look into Dr. Musa Babayo Talban Katagum's arguement) 

In fact, let us have the courage to revisit every subsidy that directly protects the purchasing power, productivity and welfare of ordinary Nigerians.

This is not a demand for reckless spending. It is a demand for economic realism, social justice and intelligent government.

No amount of economic terminology, complicated statistics or impressive vocabulary can convince the ordinary Nigerian that life is better today than it was before the removal of the petrol subsidy in May 2023.

The question Nigerians should be asking is simple:

If a policy is economically sound on paper but makes millions of citizens poorer, more vulnerable and less secure in practice, should government stubbornly continue with it—or should government redesign it?

I believe Nigeria must redesign it.

THE SUBSIDY REMOVAL WAS SOLD AS AN ECONOMIC NECESSITY

When President Bola Ahmed Tinubu announced the removal of the petrol subsidy on May 29, 2023, Nigerians were told that the policy would free enormous resources for development.

There was an economic argument behind it.

The World Bank estimated that subsidy removal could save the government about ₦2 trillion in 2023 and more than ₦11 trillion cumulatively by 2025 compared with continuing the subsidy. The IMF had similarly argued before the reform that removing fuel subsidies could create substantial fiscal savings.

But here is where the argument must become more sophisticated:

Saving money is not the same thing as creating prosperity.

Government can save ₦10 trillion and still make citizens poorer if the savings are not translated into affordable transportation, food, electricity, healthcare, education, jobs, security and infrastructure.

A government should not merely ask:

"How much money did we save?"

It must also ask:

"What did the Nigerian people receive in return?"

That is the real economic test.

WHAT HAPPENED AFTER SUBSIDY REMOVAL?

The World Bank itself acknowledged the immediate pain.

By December 2023, it reported that retail gasoline prices had increased by an average of 163 percent, while the naira had depreciated substantially following the FX reforms. It also reported inflation of 27.3 percent year-on-year in October 2023 and warned that the impact was especially severe for poor and vulnerable Nigerians.

By 2024, the World Bank reported that inflation averaged about 33 percent, while labour incomes failed to keep pace with rising prices. It estimated that another 10 million Nigerians were pushed into poverty in 2024, with almost half of Nigerians living below the international poverty line used in that assessment.

Therefore, when Nigerians say, "We are suffering," that complaint cannot simply be dismissed as political propaganda.

There is economic evidence behind it.

THE MULTIPLIER EFFECT OF CHEAP FUEL

Fuel is not merely a commodity Nigerians put inside their cars.

Fuel is embedded in almost everything.

It affects:

- transportation;

- food distribution;

- agricultural production;

- school transportation;

- manufacturing;

- construction;

- logistics;

- electricity generation;

- small businesses;

- water supply;

- household expenditure;

- commercial activities.

When petrol prices rise dramatically, the shock travels through the entire economy.

A farmer pays more to transport fertilizer and produce.

The transporter pays more for fuel.

The trader pays more to move goods.

The manufacturer pays more for logistics and power.

The consumer eventually pays for all of it.

That is the economic multiplier effect.

So when somebody says, "The subsidy was removed and government now has more money," the answer should be:

More money for government is not automatically more prosperity for citizens.

The money must be converted into productivity and welfare.

Otherwise, government may simply be transferring purchasing power from millions of households into government accounts.

"BUT STATES NOW RECEIVE MORE MONEY"

This is one of the arguments frequently presented in defence of subsidy removal.

Yes, the Federation has received more revenue.

But that does not automatically mean Nigerians are better off.

If a state receives additional allocations but citizens simultaneously face extraordinary increases in transportation, food, rent, school fees, healthcare and business costs, then the citizen may still be poorer.

Revenue allocation is an input.

Human welfare is an outcome.

We must stop confusing the two.

The World Bank itself has repeatedly emphasized that the savings from subsidy reform need to be protected and redirected toward development and poverty reduction. In 2024, it specifically called for cutting government waste and directing spending toward targeted poverty programmes.

That is exactly the point.

If Nigerians are being asked to sacrifice, government must demonstrate where the sacrifice is going.

"NELFUND EXISTS BECAUSE SUBSIDY WAS REMOVED"

Another argument is that subsidy removal created fiscal space for programmes such as NELFUND.

But this argument is incomplete.

Why should Nigerians celebrate an education loan as compensation for an economic environment that has made education itself increasingly expensive?

A loan is not the same thing as affordable education.

A poor Nigerian parent should not be forced into a situation where education becomes unaffordable and then be told:

"Do not worry; your child can borrow money to pay for it."

We should instead ask why government cannot simultaneously:

- maintain affordable tertiary education;

- properly fund universities and polytechnics;

- support students from poor families;

- expand scholarships;

- reduce unnecessary government expenditure;

- and maintain strategic subsidies that protect citizens from economic shocks.

There is no economic law that says Nigeria must choose between affordable fuel and education financing.

That is a political choice.

ARE SUBSIDIES REALLY AN ABERRATION?

Absolutely not.

Governments all over the world intervene in energy markets.

The International Energy Agency reports that fossil-fuel consumption subsidies remain widespread globally. Its latest database covers subsidies through 2024, while its policy research notes that all G20 countries maintain some form of consumer affordability support.

The IMF's global energy-subsidy database likewise shows that explicit fossil-fuel subsidies remained enormous globally in 2024—estimated at about $730 billion.

Countries that have historically used significant energy subsidies or price-support mechanisms include Saudi Arabia, Iran, Russia, China, India and Indonesia, among others. IMF data have documented substantial energy subsidies in several of these economies.

Even Saudi Arabia, one of the world's major oil producers, has continued to use fuel-price support mechanisms. The IMF reported that fuel subsidies in Saudi Arabia, measured as compensatory payments to Aramco, were above 5 percent of GDP in 2023.

The lesson is not that Nigeria should blindly copy these countries.

The lesson is much more important:

Subsidies are economic instruments. They are neither automatically good nor automatically evil. Their effectiveness depends on design, affordability, targeting, transparency and the productive capacity of the economy.

THE PROBLEM WAS NOT ONLY THE SUBSIDY

Nigeria's fundamental problem was never simply:

"There is a subsidy."

Our deeper problems include:

- corruption;

- oil theft;

- inefficient refineries;

- weak accountability;

- poor public expenditure;

- massive government waste;

- low domestic refining capacity;

- foreign exchange instability;

- inadequate infrastructure;

- low productivity;

- weak tax administration;

- and an economy excessively dependent on crude oil.

Even the IMF, while advocating subsidy removal, simultaneously emphasized the need to address oil theft, governance problems and transparency in the oil sector.

Therefore, removing the subsidy without aggressively eliminating these structural problems risks treating the symptom while leaving the disease intact.

WHY CAN'T NIGERIA CUT GOVERNMENT WASTE?

This is where the conversation must go.

Before asking the poor Nigerian to sacrifice more, government should ask itself:

How much waste can we eliminate?

How many government vehicles?

How many unnecessary delegations?

How many duplicated agencies?

How many political appointments?

How many expensive official residences?

How many unnecessary foreign trips?

How many inflated contracts?

How many abandoned projects?

How many government offices perform overlapping functions?

How much public money disappears through procurement inefficiency and corruption?

The World Bank itself has called for government to cut waste and direct expenditure toward poverty reduction and development.

Therefore, the argument should not be:

"Nigeria cannot afford subsidy."

The more intelligent question is:

"Can Nigeria afford the waste that makes subsidy reform so painful?"

REBUILD THE REFINERIES

A serious government should be obsessed with domestic refining.

Nigeria is an oil-producing country.

It is economically irrational for a country with enormous crude-oil resources to remain structurally vulnerable to imported refined petroleum products and international price movements.

Nigeria should aggressively rehabilitate viable public refineries, support efficient private refining, encourage competition and create an environment where domestic refining capacity can supply the Nigerian market.

The objective should be simple:

Produce more of what Nigerians consume inside Nigeria.

Every litre refined domestically reduces exposure to international freight, import dependence and foreign exchange pressure.

This is not an argument against market economics.

It is an argument for productive economics.

WE NEED A SMART SUBSIDY, NOT A BLIND SUBSIDY

There is also an important distinction.

I am not arguing that Nigeria should return to an opaque subsidy regime where trillions disappear without accountability.

I am arguing for a transparent, targeted and economically intelligent energy-support system.

For example:

1. Strategic fuel subsidy:

Government supports a defined portion of petrol costs when international prices or exchange-rate shocks become destructive to household purchasing power.

2. Transport subsidy:

Support mass transit rather than simply subsidizing everybody equally.

3. Agricultural fuel support:

Provide targeted energy support to farmers and food producers.

4. Industrial energy support:

Support productive industries that create jobs.

5. Transparent pricing:

Every naira spent on subsidy should be publicly accounted for.

6. Domestic refining priority:

Link subsidy policy to domestic production and refining.

7. Anti-smuggling controls:

Use technology and border enforcement to prevent arbitrage.

8. Automatic review mechanism:

Subsidies should be adjusted according to clearly published economic indicators rather than political discretion.

That is far better than pretending that government intervention is inherently evil.

THE IMF AND WORLD BANK ARE NOT THE NIGERIAN CONSTITUTION

Nigeria should listen to international financial institutions.

But Nigeria must not surrender its economic sovereignty to them.

The IMF and World Bank provide valuable economic analysis. But they do not live the daily reality of the Nigerian mechanic, farmer, teacher, trader, student, transporter or market woman.

Economic policy must ultimately serve the Nigerian people.

Even the World Bank's own recommendations acknowledge the necessity of protecting vulnerable households from the consequences of subsidy reform.

So the issue should not be framed as:

IMF/World Bank versus Nigeria.

It should be:

What economic policies actually produce prosperity for Nigerians?

If a policy works, keep it.

If it hurts citizens without delivering sufficient benefits, reform it.

If it fails, replace it.

That is responsible economic management.

THE 2027 QUESTION

By 2027, Nigerians should not vote merely on slogans.

They should demand an economic contract.

Any presidential candidate seeking our votes should answer clearly:

Will you review the fuel subsidy policy?

How will you make transportation affordable?

How will you reduce food inflation?

How will you strengthen the naira without destroying productivity?

How will you reduce government waste?

How will you rehabilitate and expand domestic refineries?

How will you protect poor households from energy shocks?

How will you make electricity reliable?

How will you create jobs rather than merely distribute palliatives?

How will you transform Nigeria from a consumption economy into a productive economy?

These are the questions Nigerians should ask.

NIGERIA DOES NOT NEED PERMANENT HARDSHIP

We must reject the dangerous philosophy that says:

"The hardship is necessary, therefore endure it indefinitely."

No.

Economic reform is supposed to lead somewhere.

Sacrifice is supposed to produce results.

If citizens sacrifice today, they should see better roads tomorrow.

If citizens pay more for fuel, they should see improved transportation.

If citizens endure higher taxes, they should see better public services.

If government saves trillions, Nigerians should see those trillions translated into hospitals, schools, security, infrastructure, jobs and productive investment.

Sacrifice without visible transformation becomes exploitation.

BRING BACK FUEL SUBSIDY—BUT DO IT DIFFERENTLY

Therefore, my position is straightforward:

Review the fuel subsidy removal.

Bring back an intelligently designed subsidy if that is what is required to protect Nigerian households and productive sectors.

But do not bring back the old system of opacity, corruption and arbitrary pricing.

Build a transparent Nigerian energy-support model.

Cut government waste.

Fight oil theft.

Strengthen accountability.

Repair the refineries.

Expand domestic refining.

Stabilize the foreign-exchange market.

Increase oil production.

Diversify government revenue.

Invest heavily in infrastructure.

Reduce the cost of governance.

Support farmers and manufacturers.

Protect the poorest Nigerians.

And above all:

Make government itself cheaper before making life more expensive for the people.

The argument is not that every subsidy is automatically good.

The argument is that government exists to improve the welfare and productive capacity of its citizens—not merely to balance spreadsheets.

Nigeria is not a poor country because Nigerians lack resources.

Nigeria's tragedy is that its enormous resources have not been converted into broad-based prosperity.

We have crude oil.

We have gas.

We have agriculture.

We have solid minerals.

We have millions of young people.

We have enormous human capital.

We have an enormous domestic market.

What we need is competent management, disciplined expenditure, industrial production, accountability and patriotic leadership.

By 2027, Nigerians should reject the politics of "endure today and prosperity will come someday."

We should demand leaders who can explain what the sacrifice is producing, where the money is going and when Nigerians will actually feel the benefits.

Because the ultimate economic indicator is not the language used in government reports.

It is the condition of the Nigerian household.

If the economy is growing but the Nigerian family is sinking, government must go back to the drawing board.

Bring back fuel subsidy where necessary. Bring back economic protection where necessary. Cut waste where necessary. Build refineries. Build infrastructure. Build industries. Build Nigeria.

Let 2027 be a referendum on whether government economic policy has actually improved the lives of ordinary Nigerians.

Mal. Ahmad M. Salihu 

Work with the Bauchi State Ministry of Education.

ahmad.msalihu22@gmail.com