By Dr Uche Diala
President Bola Tinubu said in his inaugural speech yesterday inter alia: "Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment, in public infrastructure, education, health care and jobs that will materially improve the lives of millions."
The media immediately went to town with the headline, 'subsidy is gone', and some people, including some supporters of the President, are sharing it in quotation marks attributing that to the president.
Surely, that was not what the president said in his speech, but unfortunately that is the impression that many Nigerians have right now. That is how the confusion starts, and the president's media team, if not up on its feet, will start running behind it.
The president made general statements in principle to indicate intent on several key issues and areas.
The President can not just remove fuel subsidy just like that and surely not on his inauguration day. Final removal of subsidy surely would require some navigation and planning.
Obviously, the honeymoon will be short-lived or even non-existent, as some of us anticipated. The President's media team needs to get its act together and get to work fast.
A section of the media and indeed some Nigerians have practised and perfected mischief in the last 8 years, and they are at the ready and rearing to go again.
Reports I am getting are that some filling stations are already hoarding fuel in anticipation, hoping to sell at higher prices, thereby creating artificial scarcity.
Let Me Add.
We have written many fine thesis on petrol subsidy and the need to remove it. If they want, we can reproduce them. So removal of fuel subsidy is a given. The issue now is when and how do we take the final plunge?
I have read that direct quote by President Tinubu in his speech about subsidy severally, and what I can see is a smart navigation of the issue. That is why some people have erroneously, and I dare say mischievously interpreted it that he said subsidy is gone.
The fact is that subsidy has not been removed even as we are aware that there has been a gradual or phased removal by the Buhari Administration. I am also aware that there is no budgetary provision for subsidy beyond June of this year. Yet it is not done until it is done.
Whenever fuel subsidy is finally and fully removed, there will be a shock to the system and the polity and whoever is in charge as President, I suppose that would be President Tinubu would have to and should be ready to take the hit and the heat.
That brings me to the condition(s) precedent to the final removal of fuel subsidy.
This is where the Dangote Refinery comes into play and further more the need to double down and quickly complete the repair of our state owned refineries.
This is the major plank that former President Buhari banked the subsidy removal on, and he must be commended for how far he went on that by supporting the Dangote Refinery and doubling down on the repair of our state owned refineries.
If those refineries led by the Dangote refinery come on stream, and if our projections hold, aside from more assured products availability and a marginal reduction in price, the pressure on Forex would reduce, and expectedly the value of the Naira could rise maybe up to by 40%, then we work on increasing exports in agriculture and other non oil products.
My take is that we may not be able to totally remove subsidy till around or after August when and if Dangote starts production and supply as we anticipate the Port Harcourt refinery to restart production by this year's end according to the MD NNPC Ltd.
I personally do not think petrol subsidy should remain beyond November 2023 if the government is able to navigate issues like with organised labour and others. Expect them to kick, but they can be handled. I believe President Tinubu already has a plan for that.
Make no mistake. Whenever it happens, there will be a fight, but something tells me that the majority of Nigerians are tuned to the inevitably of fuel subsidy removal by now.
We just need to manage the information well and deliberatety. Beyond information dissemination, proactive, timely, efficient and effective communication to Nigerians would be key.
The President's and government's media team need to be alert and proactive and able to predict and simulate actions and reactions to policies, prepare for and act on them, upfront.
Nigerians on our part need to be patient and cooperate with the government to achieve the goals. That would be very crucial.
#GodBlessNigeria
©️ Uche Diala
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