The federal government of Nigeria has fixed a new date to end the controversial fuel subsidy, after it failed in its past attempts.

The new date was disclosed on Thursday by the Minister of Finance, Budget and National Planning, Zainab Ahmed, who appeared before the House of Representatives’ Ad Hoc Committee investigating the Petroleum Products Subsidy Regime from 2013 to 2022.

The Minister said according to the new plan, which is contained in the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the subsidy removal will be implemented by the first half of 2023. Ahmed said the MTEF/FSP, which was approved by the National Economic Council and the Federal Executive Council, respectively, has been transmitted to the President of the Senate, Ahmad Lawan, and Speaker of the House of Representatives, Femi Gbajabiamila.

She said in a statement that not ending the subsidy means that the federal government will have to borrow more than N6 trillion to offset the budget deficit that will result from it.

“One thing that stands out in the Medium Term Expenditure Framework was that if the nation holds on to fuel subsidy as it is designed now, we will be incurring from January to December, a subsidy cost of N6.4tn. But we suggested to the Federal Executive Council, and the council approved that, maybe, we could look at the option of exiting the subsidy (regime) half year. So, if we did that, then the cost would be N3.35tn, which is half of the N6.7tn.

“The Federal Executive Council approved the second option. That is the option that was conveyed by His Excellency, the President, to the National Assembly. But Let me also say that even though this is a reduced option, it would mean that we are borrowing more than we would have borrowed if we did not have fuel subsidies.  In 2022 we are carrying the cost of subsidy throughout the whole year.

“Recall that the initial MTEF and approval by the parliament was for us to exit the subsidy by June of this year. But during the course of the year, making assessment of the difficult fiscal challenges in the economy and the hardship that our citizens are bearing due to high inflation and other challenges, we were asked to re-submit our plans and review them to include provision for fuel subsidy throughout the year 2022. That was how we came back to parliament with an incremental expense from N443bn which we had planned to up to N4tn subsidy expense in 2022,” she said.

Ahmed further stated that the subsidy payment is consuming a huge amount of funds that could have been channeled to other vital sectors of the economy.

“This situation is not desirable and it is not sustainable. It is putting the country in a very serious, dire financial situation and we do hope that we will be able to exit this subsidy regime in the shortest possible time.

“The N3.35tn in the approved MTEF that is now before the National Assembly for consideration could have been funds that would apply to other vital sectors of the economy such as health, education and social protection. So, we are carrying a burden and we must sit back as citizens and really assess whether it is beneficial for us to continue to do so,” she said.

However, the Minister did not say how the government plans to ameliorate the economic hardship that will emanate from the subsidy removal, which has been the major reason for conflict between labor unions and the federal government.

Nigeria is paying a subsidy on petroleum products because it does not have a functioning refinery, and has been importing refined products at international rates. Removing the subsidy while there is no refinery means that the Nigerian people, who are largely living beyond the poverty line, will have to buy petroleum products at unaffordable rates.

In addition, Nigerian businesses rely on power generators to function due to the country’s epileptic electricity supply. There is concern that removing the subsidy whilst the nation is still grappling with unstable electricity supply will compound Nigeria’s economic situation as it will shoot the cost of living further up.

However, experts have raised concern about the timeline for the subsidy removal. The removal is slated to take effect by June 2023, a month after President Muhammadu Buhari has left office.

“August meeting is an annual congress held by the Igbo women in August. It is a massive homecoming whereby Igbo women in the diaspora and the cities travel back to their matrimonial villages to meet with their local counterparts to discuss matters about community development, conflict management, human development, and other socio-economic and cultural initiatives. The meeting is a three-day ritual, and it is divided into three parts, the first is held at the village level, the second within the community, and the third is held in churches where thanksgivings are held to mark the end of the meeting” – Wikipedia

Growing up in an Igbo home, one of the things we looked forward to was village meetings, which parents had to attend at least once a month. It afforded us relaxing Sundays free of our bickering parents. With time, we noticed that the women’s wing of the meeting was a lot more serious than the menfolk — they had uniforms which were diligently followed, fines for latecomers and absentees, and most important to us, post-meeting debates that usually kept my mother busy on the phone. But all these monthly meetings could not compare to the August meeting which held once a year. It was a time when select members of the branches abroad travelled home to make decisions with the women in the village on issues concerning the growth of the women’s community. (Source: from the Guardian)

Igbos have practiced democracy for centuries. I can say that because kingships and thrones are rarely inherited. In Ovim, Abia State, the Eze (the king) is not inherited and that means it can move to any family, based on the decisions of the elders and councils.

Igbos empowered women well before the Western world picked the memo. Nneka – “mother is supreme”- is more than a word in the Igbo Nation. In Ovim, the Ojengwa women are like police officers in enforcing the ordinance of the local community. They can excommunicate and punish by seizing and confiscating assets as punishment. 

Umu-ada [daughters, usually married, of a clan] have enormous influence in their fatherlands. When they visit, everyone takes notice. That Uwu-ada was captured well when Chinua Achebe  in Things Fall Fall, wrote: “The following day, Uchendu gathers together his entire family, including Okonkwo. He points out that one of the most common names they give is Nneka, meaning “Mother is Supreme”—a man belongs to his fatherland and stays there when life is good, but he seeks refuge in his motherland when life is bitter and harsh.”

I can go on. The issue of gender equity built on the Western thesis is not the whole story. Most African cultures enthroned women even though men are usually more visible. In short, colonialism weakened the positions of women in Igbo Nation and other African societies as the Europeans exclusively recruited men who imposed many things through district officers. In the Aba Women riots of the late 1920s, women pushed back to the British because the new tax was affecting them more, atypical of the local ordinance.. Yes, unlike in the old culture, they were not being consulted and carried along.

When a young boy arrives at his mother’s birthplace, he automatically assumes rights over most. If you check, as elders break kola nuts and drink palm wine, they first ask “do we have nwaada here?” If there happens to be nwaada, they will acknowledge him, and once after taking the palm wine, they will give him, over the sons of the soil. The idea is this: no matter what brought you to your mother’s birthplace, you are welcome! We will feed you before we eat. You are protected from any harm.

As mothers, wives, daughters, etc return to Igbo Nation for the August Meeting, I want to wish everyone safe journeys. Deliberate in peace and continue to improve your lands. IJE OMA.

Nneka – “Mother is Supreme”

My submitted presentation for Royal Bank of Canada’s Evolve Summit 2022 in Toronto, Canada today.  Due to scheduling conflicts, I spoke remotely. My topic was “Technology and Fixing the Frictions of Nations.” Watch the 30-minute presentation.

Comments on FB Feeds

Comment 1: Thank you so much my Prof. Very insightful and interesting. Let’s begin the journey of making Africa a continent of Numbers. Let’s take advantage of cloud computing technology to enhance our computational capabilities. Let us rise to fix the market frictions, ramp up our GDP and make Africa the continent of Abundance. Thank you once again Prof.

Comment 2: Great insight….well done Prof. “When you are in Canada you don’t pray for food because they are in abundant, but in Nigeria they prayed for food because they don’t even know where the next meal will come from” this got me thinking. Most of the things we tagged miracle in African, are failure of infrastructures and innovations.