Former federal lawmaker, energy policy advocate, and public affairs commentator, Dr Farah Dagogo, spoke to Adamu Abuh on the impact of petrol subsidy removal, the debate over its possible reintroduction, and sustainable alternatives for cushioning the economic hardship faced by Nigerians, as well as the constitutional limits of economic policy entrenchment and the Federal Government’s external loans.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has indicated that the Federal Government intends to pursue a law-backed economic policy framework to prevent future administrations from reversing petrol subsidy removal and tax reforms.

What is your position on this proposal?

With due respect, I believe this proposal requires careful constitutional consideration. There is an important distinction between providing a sound statutory foundation for economic policies and attempting to make those policies permanently irreversible by future governments.

Under Sections 4, 58 and 59 of the Constitution of the Federal Republic of Nigeria, 1999, legislative powers are vested in the National Assembly and the State Houses of Assembly within their respective constitutional jurisdictions. These provisions also establish the legislative procedures through which bills become law at the federal and state levels.

Where the National Assembly has the requisite legislative competence, it may enact laws governing taxation, petroleum regulation and other matters within its constitutional jurisdiction. Such laws provide legal certainty, establish enforceable obligations and create institutional frameworks for implementation.

However, the fact that a policy has been enacted into law does not make it constitutionally immune from subsequent amendment or repeal.

The objective of economic reform should therefore be to establish clear, coherent and predictable rules that encourage investment, strengthen public institutions and promote long-term economic stability. It should not be to remove the lawful legislative discretion of future governments or deny future elected representatives the ability to respond to changing economic circumstances.

Can an Act of the National Assembly then permanently prevent a future government from reversing these policies?

No ordinary Act of the National Assembly can permanently deprive a future National Assembly of its constitutional power to amend or repeal that legislation.

A valid law remains binding until it is amended, repealed, invalidated by a competent court or otherwise ceases to have effect in accordance with the law. An incoming administration cannot lawfully disregard an existing statute merely because it disagrees with the policy behind it.

Equally, a future legislature may amend or repeal an ordinary statute through the constitutionally prescribed legislative process. That is an essential feature of representative democracy and the rule of law.

Consider the Petroleum Industry Act, 2021. It establishes a statutory framework for the petroleum industry, including provisions relating to petroleum pricing and market regulation. Those provisions have legal force, but they are not constitutionally irreversible. The National Assembly may amend the Act in accordance with the applicable legislative procedure.

The same principle applies to taxation. Nigeria’s 2025 tax reform legislation, including the Nigeria Tax Act, 2025 and the Nigeria Tax Administration Act, 2025, provides a statutory basis for significant changes to the country’s tax system. The new framework took effect from 1 January 2026 in respect of the relevant provisions scheduled to commence on that date. Nevertheless, these laws remain subject to constitutional requirements, judicial interpretation and future legislative amendment.

The fundamental distinction is between giving a policy the force of law and making it impossible for a future government to change it. The former is constitutionally permissible within the legislature’s competence; the latter cannot ordinarily be achieved by passing a conventional statute.

If the government seeks genuine constitutional entrenchment, it must comply with the applicable amendment procedure under Section 9 of the Constitution, including the required legislative majorities and approvals of State Houses of Assembly, as applicable. Even constitutional amendments must remain consistent with the Constitution’s own amendment requirements and other applicable constitutional limitations.

My position is that policy continuity should be secured through institutional credibility, transparent implementation, effective oversight, broad stakeholder consultation and demonstrable public benefits—not through an attempt to permanently bind the democratic choices of future administrations.

In a constitutional democracy, no administration should treat its policy preferences as permanently binding on its successors. Equally, no succeeding administration should disregard valid laws at will. Both the executive and the legislature must operate within the Constitution and the rule of law.

President Bola Ahmed Tinubu has requested National Assembly approval for a supplementary external borrowing plan of approximately $20.52 billion and €1.045 billion for 2026–2027. Is the proposed borrowing justified?

The question must be examined from two distinct but related perspectives: economic justification and legal compliance.

The reported request, presented to the National Assembly on Tuesday (27 October 2026), covers proposed external financing for projects and programmes in infrastructure, power, transportation, agriculture, healthcare, education, water supply, security, employment generation and public financial management reforms. The proposal has been referred for legislative scrutiny.

The scale of the proposed financing is substantial, and that alone makes rigorous scrutiny indispensable. However, neither the size of the borrowing nor the government’s stated development objectives is sufficient, in isolation, to establish whether the proposal is economically justified. Borrowing can be a legitimate instrument of national development. Economies require significant investment in electricity, transport infrastructure, healthcare, water systems and other productive assets. Where a project delivers long term economic and social benefits, financing it over time may be more appropriate than attempting to fund the entire cost from current revenue.

External borrowing may also be justified where the financing terms are competitive, the repayment profile is manageable and the projects generate sufficient economic returns or measurable public benefits. However, borrowing must not become a substitute for fiscal discipline, improved domestic revenue mobilisation, expenditure efficiency or responsible debt management. Before this proposal can be considered prudent, the government must demonstrate that the expected benefits justify the full cost and risks of the financing.

Critical questions must be asked such as, what specific projects will receive the funds? How much is allocated to each project, and what is the implementation timetable? Also we need to determine: who are the lenders? What are the interest rates, commitment fees, arrangement fees, grace periods, maturities, repayment schedules and other conditions? The economic and social returns must be spelt out. What measurable improvements in productivity, employment, revenue generation, public services or poverty reduction are expected from each investment? Is the debt sustainable? Can Nigeria meet the resulting repayment obligations without undermining essential public expenditure or creating excessive pressure on future budgets? What is the Foreign-exchange exposure? Since the loans are denominated in foreign currencies, what would happen to debt service costs if the naira depreciates significantly?

Another is the alternative financing? Has the government and its advisers compared the proposed loans with domestic financing, concessional development finance, public-private partnerships, improved revenue collection and the reprioritisation of existing expenditure? Our Implementation capacity is also an area of concern. Do the relevant ministries, departments, agencies and state-level partners have the capacity to execute the projects efficiently and prevent cost overruns, delays and procurement abuses? These are not procedural formalities. They are central to determining whether borrowing will produce sustainable development or leave future generations with substantial liabilities and inadequate public assets.

What about question of previous approvals?

I believe that is another matter that deserves particular attention: the relationship between this request and earlier borrowing approvals. Public reporting indicates that Senate President Godswill Akpabio referred to the borrowing programme’s appearance in previous budgetary and borrowing arrangements. That observation makes reconciliation essential, but it does not, by itself, establish that the current request is duplicative or unlawful. The National Assembly must establish whether the proposal represents entirely new financing, the implementation of previously approved borrowing, an extension or restructuring of an existing programme, or an additional approval for financing already contemplated in an earlier plan.

The government should publish a reconciliation schedule showing the original approvals, amounts committed, funds drawn, undisbursed balances, outstanding obligations and any additional financing now being requested. So my position is straightforward: Nigeria may legitimately borrow for development, but every borrowing proposal must be justified project by project, assessed against the country’s repayment capacity and subjected to transparent legislative oversight.

What legal principles govern the proposed external borrowing, and what should the Senate and the House of Representatives do before granting approval?

The first principle is that a presidential request for legislative approval does not, in itself, establish that every aspect of a proposed borrowing programme complies with the law. Equally, a large borrowing request is not automatically unconstitutional merely because of its size. The legal assessment must focus on the applicable statutory requirements, the terms of the proposed facilities, the purposes for which the funds will be used, the relevant appropriations and authorisations, and the procedures followed by the government. Section 21 of the Debt Management Office (Establishment, etc.) Act, 2003 provides that the terms and conditions of external loans must be laid before and approved by a resolution of the National Assembly before the Minister of Finance may approve or obtain them, subject to the Act’s applicable provisions. Section 44 of the Fiscal Responsibility Act, 2007 also establishes requirements concerning the stated purpose of borrowing, cost-benefit analysis, prior authorisation and the application of borrowed funds to long-term capital expenditure.

These provisions make clear that borrowing must be supported by more than a general statement of development intentions. The government must demonstrate the purpose, legal authorisation and economic rationale for the proposed financing. The National Assembly should therefore insist on these safeguards before reaching a final decision. The Debt Management Office and the Ministry of Finance should present updated projections covering debt service, government revenue, foreign-exchange exposure and the effects of adverse economic scenarios.

The assessment should consider the implications of lower oil revenue, weaker economic growth, higher interest rates, currency depreciation and unexpected expenditure pressures. The executive should demonstrate that the proposed borrowing satisfies the relevant provisions of the Constitution, the Debt Management Office Act, the Fiscal Responsibility Act, applicable appropriation legislation and any other governing legal requirements

My position is that the Senate and the House of Representatives should not approve the programme solely on the strength of the government’s assurances or the importance of the sectors listed. The appropriate course is to complete a rigorous, evidence-based review and approve only those facilities for which the government has demonstrated legal compliance, economic value, transparent financing terms and a credible repayment plan. Where material information is missing, clarification should be obtained before approval. Where a facility fails to satisfy the applicable legal requirements or presents unacceptable fiscal risks, the National Assembly should require revisions or withhold approval as appropriate. Borrowing must be a bridge to sustainable development, not a substitute for revenue reform, fiscal discipline and accountable governance. Future generations deserve infrastructure, productive opportunities and stronger public institutionsnot merely the repayment obligations of decisions in which they had no voice.

As a former federal lawmaker and energy policy advocate, what is your position on the growing debate over the possible reintroduction of fuel subsidy? If a full return to the former arrangement is not sustainable, what alternatives should the government consider?

The debate over petrol subsidy must be approached with economic realism, social responsibility and a clear understanding of Nigeria’s fiscal constraints. The central question is not simply whether petrol should be cheaper. It is how the government can protect household purchasing power, reduce the cost of transportation and production, and maintain affordable access to energy without creating unsustainable public expenditure, supply distortions or opportunities for corruption. We must begin by acknowledging that subsidy removal has imposed significant adjustment costs on households, transport operators, farmers, manufacturers and small businesses. Higher fuel costs have increased transportation and distribution expenses, putting pressure on food prices, the cost of essential services and the operating costs of productive enterprises. These concerns are legitimate. Government cannot dismiss the hardship experienced by ordinary Nigerians or assume that the removal of a subsidy automatically translates into improved living standards. At the same time, recognising the hardship does not automatically mean that restoring the former universal petrol subsidy is the most effective response.

The House of Representatives Committee on Petroleum Resources (Downstream) reportedly warned on Monday (26 October 2026) that a return to the former subsidy arrangement could cost more than ₦20 trillion annually. That estimate, as reported, is significant and warrants serious examination. However, it should be treated as an estimate requiring transparent supporting assumptions, not as a definitive figure without further scrutiny. The government and the legislature should disclose the methodology behind such estimates, including projected consumption, the difference between market prices and administered prices, the expected duration of the subsidy and the fiscal institutions that would bear the cost.

The fundamental questions remain: Where would the money come from? What expenditure would be reduced to accommodate it? How would the government prevent diversion and abuse? And would the relief reach the people who need it most? Subsidy removal must deliver measurable public benefits and I also believe it is important to challenge the assumption that subsidy removal, on its own, constitutes economic success. A reform should ultimately be judged by its impact on productivity, household welfare, employment, public services and long-term economic stability. If the government removes a substantial fiscal burden but citizens continue to experience deteriorating purchasing power, unreliable electricity, high transportation costs and limited access to essential services, it must explain how the reform’s benefits are being realised and distributed. Nigerians deserve transparent information on the fiscal savings associated with subsidy removal, the actual amounts realised, how those savings are allocated across the federation and the measurable benefits delivered to households and businesses. The objective should not be to defend a policy for its own sake. It should be to ensure that economic reforms improve the lives of Nigerians Rather than immediately restoring an open-ended, universal petrol subsidy, I would advocate a targeted, transparent and fiscally sustainable package of measures. Government should strengthen transparent social protection for low-income and most affected households, with clear eligibility and safeguards against patronage; provide temporary, targeted transport support through vouchers, fare support and investment in efficient mass transit to directly reduce mobility costs; accelerate CNG and other viable energy alternatives with reliable gas supply, refuelling infrastructure, safety standards and affordable conversion; and prioritise reliable electricity and support for productive enterprises to cut production costs for manufacturers, farmers, traders and small businesses.

In addition, domestic refining must be backed by transparent crude supply, fair access to infrastructure, competitive markets, strategic reserves and effective regulation to ensure reliable supply and competitive pricing, not a transfer of market power. And where exceptional shocks demand temporary price smoothing, such intervention must have a defined purpose, transparent funding, a clear duration and explicit exit conditions. We should not approach this issue as though every form of public intervention is inherently unacceptable. Governments may have legitimate reasons to provide temporary relief during severe economic shocks. However, any intervention must be proportionate, properly funded, transparent and demonstrably more effective than available alternatives. A blanket subsidy that disproportionately benefits higher-volume consumers, encourages wasteful consumption, creates opportunities for arbitrage or places excessive pressure on public finances may be less effective than targeted assistance. If a temporary subsidy or price-support mechanism is adopted, it should be supported by a clear fiscal assessment, credible funding arrangements, independent oversight and a timetable for review. The government should also evaluate the distributional effects of its choices. A policy that lowers petrol prices but crowds out essential healthcare, education, infrastructure or targeted social protection may impose costs that are less visible but equally consequential.

To make it solid, the legal aspect must be considered. The design and implementation of any subsidy programme must comply with the Constitution, applicable petroleum legislation, public finance requirements and the relevant appropriation and oversight processes. The government must establish lawful authority for the programme, identify its funding source, disclose its fiscal implications and ensure that public funds are administered transparently. Where legislative authorisation or appropriation is required, the executive must follow the applicable process. Public enterprises and other government institutions should not be used to conceal fiscal commitments or bypass appropriate accountability mechanisms. The legal framework should protect the public interest while allowing the government to respond lawfully and proportionately to genuine economic emergencies.

Nigeria must move beyond an unproductive argument in which one side treats subsidy removal as an unquestionable achievement and the other treats a return to the former system as the only acceptable response to hardship. The real test is whether the country can establish an energy and fiscal policy framework that is economically viable, socially responsive and institutionally accountable. Affordability must remain a national priority. But relief must be credible, properly funded, transparent and sustainable. Nigerians should not be forced to choose between unbearable living costs today and an unsustainable fiscal burden tomorrow. The government must demonstrate that reform delivers tangible benefits, while opposition voices and public institutions must offer constructive alternatives grounded in evidence, sound economics and the national interest.

Nigeria’s economic challenges require more than policy announcements. They demand credible institutions, sound legal foundations, transparent public finance and a sustained commitment to improving citizens’ welfare. Economic policies should be sufficiently stable to encourage investment and long-term planning, but they must remain subject to democratic accountability and lawful revision. External borrowing should finance projects that generate measurable economic and social value, not merely expand the country’s debt obligations. Energy policy should provide affordable and reliable supply while protecting public finances and supporting vulnerable households.

Ultimately, the success of economic reform must be measured not by the permanence of a government’s preferred policies, the size of its borrowing programme or the number of projects announced, but by demonstrable improvements in productivity, living standards, employment, public services and national economic resilience. The governing principle should be clear: policy continuity without constitutional rigidity, development financing without fiscal recklessness, and social protection without unsustainable public expenditure. Nigeria needs reforms that endure because they work, institutions that command public confidence because they are accountable, and economic policies that place the welfare of present and future generations at their centre.