It is no longer news that Nigerians are really going through tough times because of the removal of fuel subsidy by President Bola Ahmed Tinubu. It is a known fact that Nigeria fought for decolonization but we are now fighting for democratization.

In 2023, when President Bola Ahmed Tinubu was striving to take a shot at the Presidency, he notably championed renewed hope and vowed to change the nation’s governance narrative. One of the things he promised was rebooting and resetting Nigeria’s economy on the global stage as the largest in Africa. One of the factors working indubitably for him behind the scenes is the quality of Nigerians executing government policies in his cabinet.

President Tinubu had in March 2023 assured that he would assemble a team based on competence. He noted pointedly that it was time for politics to take backstage for governance, and that only those who shared his vision of good governance would make his blueprint for the nation feasible.  By promoting a culture of teamwork and collaboration within the government, they can encourage open communication, trust, and respect among team members. A competent team of advisors can play a very salient role in helping the President fulfil his campaign promises and provide strategic support and advice on key policy issues that align with his vision.

But is that what Nigerians are witnessing now? Reverse is the case my readers. With more than half its revenue derived from oil exports, Nigeria’s economic fortunes are tied to the boom and bust cycles of the oil market. Those fortunes have waned way below expectations in the past one year and, with more than one-quarter of its labour force jobless, it is time to question the country’s economic pathway.

For decades, the mantra of ‘economic diversification’ characterized attempts to reverse Nigeria’s dependence on oil with little real progress. Despite numerous reforms, international loans and restructuring programmes, 85 million Nigerians live in deteriorating conditions of poverty.

President Tinubu in his 1st month of fuel subsidy removal said the country saved a trillion Naira.  If it did, how the government used the savings will be a big question to ask, because Nigerians are still living far down the poverty line.  Unemployment is increasing by the day, hospitals are lacking lights and infrastructural facilities, educational institutions are nothing to write home about and insecurity is on the high side.

The purported saved trillion could provide support for Nigerians who are waning and languishing in poverty.  The right policy mix combined with aggressive funding can position the country as a renewable energy leader, both on the African continent and globally. And it will reap the benefits in technology development, foreign investment, decreased emissions, poverty reduction, and energy for the 80 million people currently without access to the national grid – all of which could ripple into millions of clean energy jobs in manufacturing and installation across the country.

The overdependence on oil revenues as the mainstay of the Nigerian economy is a key factor contributing to the unproductive base of our economy, as it was perceived as entangled in massive fraud and corruption, leading to an escalated cost that continued to be unbearable on the Nigerian purse and people.

The renewed hope agenda of BAT promised heaven on earth from the proceeds of fuel subsidy removal, and he made a case before the citizens that fuel subsidy was a scam enjoyed by the elites in the country who run the oil sector of the economy. Despite the belief of BAT that the removal of oil subsidies will increase the level of hardship in the country, which BAT echoed at various times when he was a member of opposition parties when PDP was ruling the country, including in his article ‘The Jonathan Tax’ which was a clear explanation of the level of hardship citizens are likely to be engulfed in, the BAT administration believes oil subsidy must go.

In his inauguration speech on May 29, 2023, BAT announced the complete removal of oil subsidies from the country. The very hour he made the announcement, the price of fuel skyrocketed. Petroleum is the energy driving the Nigerian transport system, and the movement of its prices has resulted in an unprecedented skyrocketing of prices for almost everything in the economy, resulting in people being plunged into hardship because their income was stagnant. At the same time, their expenditures were multiplied many times.

Many argued that citizens’ purchasing power was the main reason why the level of hardship in the economy was biting hard. Labour unions ask for a revised minimum wage to meet the nation’s economic realities, which might be a valid claim. However, some consider the unemployment level as the main challenge. Therefore, while the quest for a revised minimum wage is genuine and seen as “underemployment”, unemployment is a much bigger problem. Therefore, the level of hardship in the Nigerian economy is high because there is serious “underemployment” and unemployment in the country, leading to reduced purchasing power that did not match the inflation rate ignited by the removal of oil subsidies by the BAT administration.

The foreign exchange regimes in Nigeria have been a serious contentious issue for decades, suggesting that many past administrations used it to enrich favourites at the detriment of the economy's growth. Countries earn adequate liquidity in the foreign exchange reserve to meet the needs of their citizens’ foreign exchange through their productive base, which exports excess after satisfying citizens domestically.

It is prevalent that the Nigerian economy is consuming, not productive, with almost everything imported into the economy, making foreign exchange demand high and continuous. With the high level of demand for foreign exchange to meet citizens’ quest for consuming imported products, it is obvious that government intervention to stabilize the foreign exchange rate is not feasible. Market forces remain the only feasible determinants of price in a free-market economy such as Nigeria’s. The only way the Naira will become strong is when the country’s production base is strong enough to provide for citizens and export excess to increase reserve forex.

Consequently, the prices of goods and services in the economy continued to rise because of three pushes: Reviewed fuel prices based on fluctuating forex prices, prices of imported goods and services due to fluctuating forex prices, and prices of domestically produced goods and services due to fluctuating forex prices. Therefore, inflation in the economy is further escalated due to the floatation of the Naira because of citizens’ way of life by consuming imported goods and services and the inability of the economy to provide the necessary infrastructure that will ignite and enhance the productive and manufacturing base of the economy.

The massive past and present corruption remains a huge monster that has contributed to the present economic hardship. The insecurity in the country remains the monster preventing farmers from farming and preventing foreign direct investment in the economy; therefore, it adds to the hardship in the economy.

Inflation is a monster added to hardship, but the underlying factors include under-employment, unemployment, subsidy removal, and floatation of the Naira. All the claims made by the government that they have being making a lot of gains by the removal of fuel subsidy appears that the government is reaping all the benefits while she is dodging all responsibilities to the people. Nigeria must start looking inwards, investing its resources in designing and funding a green transition strategy.

God Bless Nigeria!!!