The President of Federal Republic of Nigeria, Mr Bola Ahmed Tinubu while on an official engagement in Beijing, China had an interaction with Nigerian diasporans where he stated that the increase in petrol price is a ‘bold and unprecedented decision’ necessary for economic growth of Nigeria.
This statement was made by President Tinubu to justify the increase of pump price of PMS popularly called petrol in Nigeria from the former price of less than N700 per litre to more than N800. This is the second time President Tinubu led administration has increased the pump price of PMS using its wholly owned private company, NNPCL.
The first was on 29th of May, 2023 during his inaugural speech. Nigerians heard and saw the President shout, subsidy is gone and the next day the price of PMS skyrocketed to N550 to N600 depending on your location in Nigeria.
The reason advanced for the subsidy removal is that the funds saved would be used to fund developmental projects, especially hard infrastructure like roads, rails, housing, power and the soft infrastructure such as health and education.
To cushion the impact of the removal of PMS subsidy, the federal government stated that it will provide CNG buses for transportation and open up CNG conversion centres in major cities in Nigeria where car owners can convert their cars to CNG fuelled vehicles.
However, fifteen months into the present administration of President Tinubu, Nigerians are yet to see the CNG conversion centres operational and the CNG buses for mass transport are not yet deployed by the FGN.
Unfortunately, Nigerians depend heavily on the use of PMS as energy source for generating electricity for domestic uses, businesses and for fuelling of their vehicles. Our dependency on PMS is so huge that our country is dubbed generator economy.
Our dependence on PMS for generation of electricity cannot be over emphasised because in many rural communities in Nigeria, petrol powered generators are the only source of electricity for commercial ventures. Even in urban centres, the narrative is almost the same.
The implications for excessively depending on fossil energy for businesses are enormous and far reaching. The increase in pump price of PMS has escalated the cost of production in Nigeria, therefore causing cost push inflation which translates to increase in consumer prices of goods and services, low turnover, low profit margin for manufactured goods and the deaths of many micro and small businesses in the country which was estimated to be 18 million and due mainly to their inability to cope with cost of doing business in the country. This also suggests that more than 18 million Nigerians within the fifteen months of the current government have lost their sources of income thereby increasing the number of the unemployed persons able and willing to work.
Not only are the micro and small businesses dying, the Multinational companies are also relocating their business outfits to other countries in SSA with resultant loss of employments.
The number of the unemployed is increasing while job opportunities are decreasing because of the exodus of companies from the shores of Nigeria. This was certainly not the state of affair during the eight years of former President Buhari’s maladministration that gifted Nigerians with two economic recessions.
Not only are the everyday Nigerians negatively affected by this PMS price hike, the federal government is also losing tax revenue from personal income tax, company income tax, education tax, etc, which are on the decline.
Generally, I can conveniently state that Nigeria’s economy is nosediving at an astonishing velocity and both the citizens and the subnational governments are victims.
Nigerians are passing through tough times occasioned by the current FG policies which appear to target more of the income of the poor and middle classes in Nigeria than the income of the high political and economic elites in Nigeria.
Not only are citizens of Nigeria experiencing existential threats from the bold and unprecedented decision necessary for economic growth as stated by President Tinubu, the economy of Nigeria is also nosediving as shown by macroeconomic variables. Exchange rate of naira to dollar is above N1500 at official rate for an import dependant country such as ours. Interest rate is above 28%, and so also is inflation rate above 30%. In real terms the revenue of the country is declining even though the nominal value is Increasing. This explains why the country is the third highest debtor country to World Bank, the poverty capital of the world with over half of the entire population of the country currently experiencing multidimensional poverty.
Fifteen months and still counting, can we rightfully say based on experiential realities that these bold and unprecedented reforms are producing favourable outcomes in the country? Certainly, the answer is NO. However, I am tempted to conclude that the only beneficiaries of the bold reforms in the country are, Mr President and members of his political and filial families. At least, it is a known fact in the public domain that he recently bought brand new Presidential Jet worth Billions of naira, armoured car, a yacht and his relation acquired Agip oil company.
