By Obinna Ejianya (9News Nigeria – Melbourne, Australia)
## Understanding the Fuel Price Hike, Its Impact on The Economy and Adverse Effect on Average Nigerian Citizen.
Whereas Nigerians were crying under Buhari, suffering in Nigeria has gotten to an unbearable level since President Tinubu assumed office on 29th May 2023.
This suffocative hardship on Nigerians was evidently fuelled by the so-called “Removal of Subsidy,” which even if it was genuinely done with good motive, was rashly ordered into implementation.
Policies on Fuel hikes should never be done in a rush, being that fuel/petrol is the source of the energy that powers every economy.
Be it the global economy or the national economy, fuel price is always one of the quintessential determinants of the state of any economy.
In simple economic knowledge, economic condition is simply the ability of people to buy necessary needs affordably. With that basic information, the logistics for the availability of such necessary needs are highly or mainly dependent on the availability of the means of transportation be it by sea, air or road.
This is why every cent increase in the global price of fuel reflects on the global economy as well, talking less of a national economy like that of Nigeria.
Therefore, there is no justifiable economic reason why the just inaugurated government of President Bola Ahmed Tinubu should rush into a rapid drastic increase in the price of fuel all in the pseudo garb of “Removing subsidy” as it were.
In common economic sense, the economy is controlled by making goods and services available at reasonable quantities and as well providing purchasing power, which is money, the means of exchange of goods and services. In such equilibrium, the economy is conducive for the common man irrespective of other factors.
Having thrown light into the simple matrix of running a common economy as that of Nigeria, we will now make practical suggestions that could workably bring the economy to a conducive condition and allow “the poor to breathe,” just in a very short time.
The recent fuel price hike in Nigeria has had a devastating impact on the lives of poor citizens across the country. The removal of fuel subsidies has caused a sharp increase in the cost of living, making it even more difficult for struggling families to make ends meet. In this article, we will explore the consequences of this decision and discuss five actions that President Tinubu should take to alleviate the suffering of poor Nigerian citizens.
Understanding the Fuel Subsidy Removal and Its Consequences
The fuel subsidy removal was implemented with the intention of reducing government expenditure and promoting economic growth. However, the consequences of this decision have been far-reaching and detrimental, particularly for the most vulnerable members of society. The sudden increase in fuel prices has led to a surge in transportation costs, making it more expensive for people to commute to work or school. This, in turn, has negatively impacted their ability to earn a living and access essential services.
Moreover, the rise in fuel prices has also caused a domino effect on the prices of other essential commodities. Food prices have skyrocketed, making it increasingly difficult for families to put meals on the table. The cost of electricity has also increased, putting an additional burden on households already struggling to make ends meet. Overall, the removal of fuel subsidies has had a cascading effect on the cost of living, exacerbating the suffering of poor Nigerian citizens.
The Worsened Suffering of Poor Nigerian Citizens Due to the Fuel Price Hike
According to the National Bureau of Statistics, In Nigeria, 40.1% of people are poor according to the 2018/19 national monetary poverty line, and 63% are multidimensionally poor according to the National MPI 2022.
The fuel price hike has hit poor Nigerian citizens the hardest. For those living below the poverty line, every naira counts, and the increase in fuel prices has pushed them further into destitution. Many families are now forced to choose between buying food or fuel, leaving them in a constant state of hunger and despair. The lack of affordable transportation options also means that children are unable to attend school regularly, depriving them of an education and perpetuating the cycle of poverty.
Additionally, the rising cost of living has led to an increase in crime rates, as desperate individuals resort to illegal activities to survive. This not only poses a threat to public safety but also perpetuates a vicious cycle of poverty and crime. The suffering of poor Nigerian citizens cannot be ignored, and urgent action is needed to alleviate their plight.
Five Actions President Tinubu Should Take to Ease the Suffering of Poor Nigerian Citizens
- Reverse, without hesitation, whatever policy that birthed the quadruple increase of fuel prices in Nigeria:
The first and most crucial action that President Tinubu should take is to reverse the fuel subsidy removal. This would immediately bring down the cost of fuel and provide relief to poor Nigerian citizens. By reinstating the subsidies, the government can ensure that fuel remains affordable, allowing people to commute to work, access essential services, and provide for their families.
In addition to reversing the fuel subsidy removal, President Tinubu should implement measures to stabilize fuel prices in the long term. This could include exploring alternative sources of energy, investing in renewable energy infrastructure, and promoting energy efficiency. By diversifying the energy sector, Nigeria can reduce its dependence on fossil fuels and mitigate the impact of future fuel price fluctuations.
- Reduce Import Duties and Ease the Means of Importation of Essential Commodities:
The second action the President should take without hesitation is the easing of the means of importation and reducing import taxes on essential commodities. If possible, this policy should apply to all commodities whose local productions are not yet in abundant quantum quantity.
To address the rising cost of living, President Tinubu should reduce import duties and ease the means of importation of essential commodities. Singapore and Dubai have successfully implemented similar strategies, importing almost everything with low or no import duty. By adopting a similar approach, Nigeria can lower the prices of essential goods and make them more accessible to poor citizens.
While some economic analysts may have the opinion that allowing the importation of such commodities may crash the economy and make the Naira fall due to scarcity of foreign exchange. I want you to understand the current position of the Nigerian economy and its effect on the citizens. We are now at a subsistence level where the citizens are striving for access to their life’s basic needs, food and food security. This means that most Nigerians do not have enough food to eat nor do they have hope for the next food after one meal.
This is like a war situation in which international aids fly in food for the trapped people. In that situation, you do not need to impose tax on food and clothing that are being flown in for the victims of war. They need the availability of those essential commodities for day-by-day survival until when the war is over.
By the time the people have access to food and food security, then you talk of a complex economic policy implementation where the government would plan for the stability of the foreign exchange and local currency. At that level, there is already availability of local sources of those essential commodities at a very affordable price.
In 1985 when the United Arab Emirates was not known as anything but a crude oil-producing country, they introduced a Free Zone commercial policy that turned Dubai and all of the UAE into what it became today.
Dubai started its economic growth and development as an international business free-zone. Goods manufactured in East and South Asia were imported into Dubai on an import duty-free basis, and then Dubai became a world business hub where other countries come to export the goods from Dubai. Today, Dubai is a city and emirate in the United Arab Emirates known for luxury shopping, ultramodern architecture and one of the world’s business investment hubs.
Singapore on the other hand, solely depends on importation for the survival and living of the citizens and expats in the country. Singapore does not have enough land for infrastructure, so they do not do any form of large-scale farming. They import their food from all over the world. The source of their water, vegetables and other food is Malaysia. Singapore does not even have sand and stones for building their skyscrapers and resident houses, so they import sand from Indonesia.
Like Dubai, Singapore only leverages its position as a central route for shipments. Every shipment from Australia, Oceania and Asia passes through Singapore. That is an advantage that allowed Singapore to focus on rendering services to the world and also having American factories that produce microchips for electronics. Singapore also cleverly partnered with other countries and built crude oil refineries. Singapore is the world’s top Maritime Hub.
- Slash the Cost of Running the Government and Emoluments Paid to Retired and Serving Lawmakers and Governors:
Another critical action that President Tinubu should take is to slash the cost of running the government and reduce the emoluments paid to retired and serving lawmakers and governors.
This exercise and policy if implemented efficiently in earnest transparency will accrue a lot of excess money that would be used for areas that require critical attention. This excess money can then be redirected towards social welfare programs, providing support to those most in need.
This means that there will be more than enough money to pay pensions and financial support to Nigerians who are in between jobs or lacking jobs.
There will be sufficient money to support the SMEs and SME startups who will be encouraged to create jobs and employ jobless Nigerians. This will create a cycle of economic boost and boom for everyone and ameliorate the tension and suffering in the country.
The effect will yield a paradigm shift in the way the citizens see life. No more survival instinct that breeds criminal drives and intentions.
By tightening the belt and prioritizing the welfare of the people, the government can make a significant impact on poverty alleviation.
At this level, the government will start inventing policies to drive Nigeria towards complex economic policies that involve infrastructural development and monetary policies to enhance and maintain a sustainable economy, GDPs, foreign exchange and foreign reserves.
- Focus on Job Creation and Poverty Alleviation Programs:
President Tinubu should prioritize job creation and poverty alleviation programs to tackle the root causes of poverty. By investing in industries that have the potential to create employment opportunities, such as agriculture, manufacturing, and technology, Nigeria can provide livelihoods for its citizens and reduce dependency on government assistance. Additionally, targeted poverty alleviation programs can provide support to the most vulnerable members of society, helping them break free from the cycle of poverty.
- Improve Access to Basic Services and Social Welfare Programs:
Lastly, President Tinubu should focus on improving access to basic services and social welfare programs. This includes investing in healthcare infrastructure, education, and social protection schemes. By ensuring that every Nigerian has access to quality healthcare, education, and social support, the government can uplift the lives of poor citizens and provide them with a path out of poverty.
The Potential Benefits of These Actions for Poor Nigerian Citizens
Implementing these actions would have a profound impact on the lives of poor Nigerian citizens. Reversing the fuel subsidy removal and stabilizing fuel prices would immediately alleviate the financial burden on families, enabling them to afford transportation and access essential services. Reducing import duties and easing the means of importation of essential commodities would lower the cost of living, making it more affordable for people to meet their basic needs.
Moreover, slashing the cost of running the government and redirecting funds towards social welfare programs would provide much-needed support to those living in poverty. Job creation and poverty alleviation programs would empower individuals to earn a living and break free from the cycle of poverty. Lastly, improving access to basic services and social welfare programs would ensure that every Nigerian has equal opportunities to succeed and thrive.
Addressing Potential Challenges and Objections to These Actions
While implementing these actions may face challenges and objections, it is essential to prioritize the well-being of poor Nigerian citizens. Critics may argue that reversing the fuel subsidy removal would strain government finances or that reducing import duties would harm local industries. However, the suffering of poor citizens cannot be ignored, and urgent action is needed to alleviate their plight. By carefully planning and implementing these actions, the government can find a balance that benefits both the economy and the people.
The Role of Civil Society and Public Opinion in Advocating for Change
Civil society organizations and public opinion play a crucial role in advocating for change. By raising awareness about the suffering of poor Nigerian citizens and putting pressure on the government, they can influence policy decisions and drive positive change. It is essential for citizens to voice their concerns and demand action from their elected representatives. Together, civil society and public opinion can create a powerful force for change and ensure that the needs of the poor are heard and addressed.
Conclusion: Urgency for President Tinubu to Take Immediate Action
The suffering of poor Nigerian citizens due to the fuel price hike cannot be ignored. President Tinubu must take immediate action to reverse the fuel subsidy removal, stabilize fuel prices, reduce import duties, slash government expenses, focus on job creation and poverty alleviation, and improve access to basic services and social welfare programs. By addressing these issues, President Tinubu can ease the suffering of poor Nigerian citizens and pave the way for a more equitable and prosperous future for all. It is time for urgent action and a commitment to the well-being of the most vulnerable members of society.
By Obinna Ejianya (9News Nigeria – Melbourne, Australia)
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