Friday, 1st December 2023

Subsidy: Quest for labour-government partnership

By Editorial Board
16 August 2023   |   4:00 am
The suspension by the Nigeria Labour Congress (NLC) of its proposed strike over government’s removal of fuel subsidy is a pragmatic and reasonable thing to do, going by projections that the strike


The suspension by the Nigeria Labour Congress (NLC) of its proposed strike over government’s removal of fuel subsidy is a pragmatic and reasonable thing to do, going by projections that the strike, if it holds, will only compound the already bad economic situation of Nigeria and Nigerians. Organised labour took the suspension decision following meetings with Federal Government officials and President Bola Tinubu’s assurances that the government was working to assuage their concerns. Tinubu had reportedly promised immediate implementation of some proposals raised at the meeting with the Labour leaders.

It is instructive that the workers’ union had embarked on a country-wide protest against government’s policies and their biting effects on workers and Nigerians generally. Since the government’s removal of fuel subsidy on May 29, 2023 in particular, cost of living has skyrocketed and most Nigerians have been groaning in hardship, prompting Labour to announce a nationwide protest on Wednesday, August 2, 2023 despite government’s protestation that it would amount to contempt of court, going by an interim order earlier obtained by government against the protest.

As the country enjoys some respite from the workers’ protest and strike, it is important that both labour and government examine their roles towards moving the country away from its present economic quagmire. There is no doubt that the high cost of living is seriously grounding citizens and expanding the frontiers of poverty which was already well entrenched among the populace. However, this is the time to focus on solutions rather than actions that will invariably complicate and worsen workers’ plight. A spirit of give and take is most required in the circumstances, more so as there can be no quick-fix solution to the problem, which has grown from years of neglect, mismanagement and inappropriate measures by preceding administrations.  But Tinubu’s government has a duty to move fast and ensure that its measures are effective against the complaints. Nigerians’ little patience is fast running out, notwithstanding the circumstances leading to the subsidy removal, with most people in agreement that unless it is removed, fuel subsidy will likely subdue the country.

Earlier on Monday, July 31, the government admitted that citizens were going through renewed hardship in a nationwide address wherein Tinubu justified the economic reforms that instigated the hardship. He went on to unveil a N500 billion package to ease pains of subsidy withdrawal. The President agreed that the economy was going through a tough patch and citizens were hurting. He admitted that households and businesses were struggling and that there was anxiety in the land. But he blamed it on a tiny group of rent seekers that benefitted from subsidy payments to the detriment of Nigerians. He then went on to unveil a set of subsidies to cushion the effects of subsidy removal.

For the manufacturing sector, he promised N75 billion between July 2023 and March 2024 to fund 75 enterprises with great potential to kick-start a sustainable economic growth at single digit interest plus favourable repayment terms. For micro, small and medium-sized enterprises, the President announced a N125 billion fund out of which N50 billion will be disbursed on Conditional Grant to one million nano businesses targeting 1,300 nano business owners in each of the 774 local governments across the country. Another N75 billion is to be made available to 100,000 MSMEs and start-ups, with each enterprise promoter receiving between N500,000 to N1million at 9% interest per annum and a repayment period of 36 months.

To stem high food inflation, the President ordered the release of 200,000 metric tonnes of grains from strategic reserves to households across the 36 states and FCT. Tinubu also promised 225,000 metric tonnes of fertilizer, seedlings and other inputs to farmers who are committed to the government’s food security agenda. The President added that the government will invest N50 billion each to cultivate 150,000 hectares of rice and maize as well as N50 billion each to cultivate 100,000 hectares of wheat and cassava.

As lofty as the President’s address sounded, it will be meaningless, and will provide no shield for the government if they are not firmly and efficiently implemented.  Immediate measures are still missing, and time is of essence; the sooner these interventions begin to materialise, the better for the groaning citizenry and for the government. If the government must realise its objectives and plans, it must ensure that citizens and businesses are comfortable materially and otherwise as partners in the social contract. Otherwise, a discontent populace is not an easy one to govern.

Already, social angst has surfaced in hotbeds around the country, with unruly characters ready to breach the social order because of the hunger in the land.

In Adamawa State, for instance, unruly and lawless characters invaded the warehouse of the National Emergency Management Agency (NEMA) in Yola, to loot items stored to alleviate seasonal flood emergencies. In other places, social crime has spiraled as malcontent urchins are out to cash in on the situation, a reenactment of the EndSARS experience when many warehouses across the country were invaded and emptied by irate youths. Already, states have activated their Disaster Risk Units (DRU), comprising different security personnel of different security agencies to mount guard at various warehouses.

Beyond announcing palliatives to cushion effects of hike in fuel price and deploying security to mitigate and/or manage unintended consequences, the situation in the country is dire. It is incumbent on government to walk its talk and be seen to concretely address the rising poverty in the land. Government must show empathy by doing tangible things such as empowering the people and reducing the cost of doing business. Electricity supply is still not good enough for citizens to engage in productive activities at affordable costs.

At this point, all top political office holders in the National Assembly and the Executive should submit to a salary slash of at least 50 per cent and begin to expunge all ostentatious attitudes in the public space. Government must make education accessible to all Nigerians and cancel tuition fees that are being introduced surreptitiously in varsities across the country. This is not the time to add to citizens’ woes.

It is equally important that henceforth, government policies are critically and structurally processed in robust debates before implementation. A situation where far-reaching decisions are taken by the government without citizens’ buy-in and inputs should be avoided.

For the nation’s oil sector, this is the time to carry out detailed investigations to unravel its characteristic dysfunction and corruption. For an oil producing country not to have one functional refinery is condemnable and unacceptable. All those who are responsible for the mediocre state of affairs in the sector must be investigated and sanctioned for ruining its prospects. Government should also deal with the root cause of the malaise in the sector to make it a springboard for industrialisation and growth.

For Labour, peaceful protests are a welcome option in the campaign for better welfare for citizens and workers. This time, however, calls for forthrightness in closet negotiations as the country cannot afford absence of intellectual rigour and incoherent dialectics.

Labour must be firm, clear-headed and realistic in its suggestions to save the country’s economy and workers.