Nigeria's current economic reforms have sparked heated debates among citizens, particularly regarding the removal of subsidies on petrol, electricity, and other essential services. The deregulation of the Naira, alongside increases in taxes, interest rates, and costs of essential services like renewing a driver’s license, have further complicated an already dire situation for millions of Nigerians. These changes have significantly exacerbated economic hardships, plunging more people into poverty, with reports indicating that a majority of Nigerians are grappling with multidimensional poverty.
Rising inflation has rendered the current minimum wage virtually ineffective. Even with the proposed 70,000 Naira minimum wage, it remains insufficient to cover basic needs. For instance, the cost of a 50kg bag of rice now exceeds the monthly earnings of many workers, while fuel prices make transportation to work a financial burden. It’s increasingly clear that, for the average Nigerian, survival has become a daily struggle, with income barely covering transportation costs, let alone other living expenses.
The high cost of living has skyrocketed, and for an import-dependent economy like Nigeria, the free fall of the Naira has made things even worse. Our savings continue to lose value as inflation soars, leaving Nigerians with dwindling purchasing power. Despite this, some optimists maintain that the current reforms will eventually yield positive results, believing there is light at the end of the tunnel. But the question on many minds remains: What if NEPA takes the light at the end of the tunnel?
This metaphorical question isn't merely sarcastic or pessimistic; it's rooted in a pattern of failed reforms. Nigeria’s history is filled with well-intentioned economic policies that have failed to deliver meaningful results for the majority of citizens. Instead, these policies often benefit only the elite, the fortunate 1%, while the rest of the country remains in the dark—quite literally, if NEPA, Nigeria's electricity authority, were to “take the light” again.
A History of Unfulfilled Promises
Past presidents have consistently introduced policies aimed at stabilizing the Naira and curbing inflation, yet the results have often left much to be desired. During President Olusegun Obasanjo’s administration, experts warned that without significant reforms, Nigeria’s banking sector would collapse. This led to the recapitalization of the banks, which was touted as a major achievement. While the banks now boast greater liquidity, access to loans remains a challenge for ordinary Nigerians. Interest rates of up to 30% make it nearly impossible for anyone but the wealthiest or those involved in illicit activities to benefit. One might wonder if the banks are better suited to serving drug dealers or politicians than the average Nigerian entrepreneur. The Central Bank of Nigeria (CBN), like NEPA, appears to take the light at the end of the tunnel, dashing hopes for real financial inclusion.
Subsidy Removal: The Promised Solution?
From President Goodluck Jonathan to President Bola Ahmed Tinubu, government officials and policymakers have claimed that Nigeria's economic woes could be traced back to the controversial fuel subsidy. The removal of this subsidy was heralded as the key to unlocking Nigeria’s economic potential, with promises that it would lead to improved infrastructure, reduced inflation, and enhanced living standards.
Fast forward to May 29, 2023, when President Tinubu announced the removal of the fuel subsidy. Instead of ushering in the anticipated economic boom, the country saw fuel prices skyrocket, driving inflation even higher. The average Nigerian has experienced no significant improvement in their quality of life. Oil marketers, the Nigerian National Petroleum Corporation Limited (NNPCL), and other stakeholders—acting as modern-day NEPA—have effectively extinguished the light at the end of the tunnel, keeping Nigerians in perpetual economic darkness.
The Dangote Refinery: A Case Study in Sabotage
One of the most perplexing examples of Nigeria’s economic paradox is the saga of the Dangote Refinery. For years, policymakers argued that importing petroleum products was the primary cause of the Naira’s depreciation, rising inflation, and job losses. Billions of dollars were poured into the maintenance of Nigeria’s refineries, yet no significant progress was made. Then, Aliko Dangote broke the jinx, building the largest single-train refinery in the world, right here in Nigeria.
Rather than celebrate this monumental achievement, however, powerful interests—including government officials and stakeholders within the oil industry—sought to downplay its potential benefits. In fact, the NNPC has spent millions of dollars on media campaigns, employing academics and influencers to convince Nigerians that the Dangote Refinery would not reduce fuel prices. They argue, quite illogically, that Nigeria must continue importing fuel if it wants to avoid a crisis. This deliberate sabotage is yet another example of how the proverbial NEPA takes the light at the end of Nigeria’s tunnel, keeping the nation dependent on a flawed system.
A Pattern of Failure
Time and again, Nigeria's ruling elite have introduced reforms that promise to deliver prosperity for all, only to watch those promises crumble. From the failed banking sector reforms to the botched subsidy removal and the sabotage of the Dangote Refinery, it seems that every step forward is accompanied by two steps back. And always, somewhere in the shadows, the metaphorical NEPA stands ready to take the light just as Nigerians begin to hope for better days.
The next time someone promises that there is light at the end of the tunnel, perhaps it’s worth asking whether they, too, are part of the NEPA that will inevitably take that light away.
Mohammed Bello Doka writes from Abuja, Nigeria.
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Opinion