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Wednesday, January 4, 2012

Not so SURE about subsidy removal?

The subsidy on imported petroleum products had to go.   Predictably, the subsidy remains misunderstood and Nigerians are protesting its removal.
Let's be honest, it's not easy to deal with a sudden doubling in pump price of petrol.  This is why the promised alleviation programs must begin quickly.  Already, at least one state government has announced free buses for workers.  Many states should partially subsidize mass transit, at least for a few months.  

Also, even though the government lists several development projects (health and agriculture, electric power and rail transport, etc) that will be funded using the savings from fuel subsidy removal, many are skeptical of a corrupt system. How do we know that this money won't also be stolen, they ask?
This means that again, the Nigerian government has to prove itself through successful programs and real improvement in quality of life and economic indicators.  See the SURE document here: Subsidy Reinvestment and Empowerment Programme.

If the subsidy had to go, another item that needs to be cut quickly is recurrent expenditure: a lot of the money spent on pampering government officials could go to development.  This will have another positive effect: politics will become a less attractive career option for thieves and thugs.
If Nigerians can be quickly assisted with lower transport fares and if we start to see government cutting its own waste and investing in our own needs like power, jobs, refineries, and all that, everybody will calm down and stop protesting. 

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1 comment:

  1. Nine days later: The government announced buses on Saturday (and also cut government salaries by 25%). The palliative measures were not welcomed by the people; it only annoyed some people more.
    (Instead the entire week there were strikes and protests.)

    That told me that this matter is beyond subsidies:
    Maybe the elite don’t want to cut their use of petrol. Maybe the unions think government disrespected them. Maybe some people don’t trust the government. Maybe some people want to cause chaos. Maybe some people are just afraid of change. Maybe some people do not understand that we need to bake a bigger cake, not just hustle over the existing cake. Maybe it’s personal. Maybe it’s politics. Maybe it’s money.

    But I know that very soon, the country will make progress one way or another.

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