Nigeria’s President defends end to fuel subsidy

Nigerian President Bola Tinubu on Wednesday defended the West African nation’s decision to stop subsidizing fuel, a move that already is adding to economic hardships by pushing up prices for transportation and commodities.

The money saved by endng the decadeslong subsidy last week will help the government’s efforts to fight poverty and its initiatives, Tinubu told governors in a meeting in the capital city of Abuja.

He appealed for patience even though hardship is biting harder on millions of citizens.

“We can see the effects of poverty on the faces of our people. Poverty is not hereditary, it is from society. Our position is to eliminate poverty,” a statement from the Nigerian presidency quoted Tinubu as saying.

The governors supported the subsidy removal and promised to work together in implementing it, the presidency’s statement said.

Though Nigeria is an oil-producing nation, it depends on imported refined petroleum products and the government has been subsidizing the cost for decades.

But with oil revenues dwindling amid chronic theft and decreasing foreign investment, the government said the fuel subsidies are no longer economically sustainable. It budgeted 4.4 trillion naira ($9.5 billion) for the subsidies in 2022, far more than for education, health care and infrastructure combined.

Analysts, however, faulted the government’s decision to withdraw the subsidy without incentives in place, especially at a time when many Nigerians already struggle to cope with record high unemployment and poverty. Inflation is at an 18-year high. Unions have threatened strike in protest of the subsidy decision.

Nigeria’s states have begun to adopt various measures seeking to assist citizens, especially workers commuting to work daily. Edo and Kwara states this week cut the work week from five days to three. Other states said Wednesday they are considering such measures as increasing the minimum wage of 30,000 naira ($65).

In Abuja and other parts of Nigeria, The Associated Press found businesses struggling after the subsidy end as they are forced to spend more money on fuel for generators. As many as 46% of Nigeria’s people do not have access to electricity, the World Bank says.

In Kano state, the economic hub of northern Nigeria, Mahmud Mudi, a taxi driver, said he had to halt his transport business because he was losing money with higher expenditure on gasoline.

“The situation is unbearable,” Mudi said. “As a family man, the already unfriendly economy has been worsened by this removal of fuel subsidy. I have had to suspend my taxi operations and rely on divine intervention.”

Rafi’atu Audi, a government employee in the state, said it is difficult to commute to work daily because of the sharp increase in transportation costs.

“Transport fares have shot up, but our salaries remain the same,” said Audi. “It’s painful (and) I cannot bear the costs anymore”.