Zacch Adedeji’s arithmetic

The long-standing fuel subsidy regime in Nigeria, initiated in 1973, evolved into a significant fiscal burden, ultimately becoming unsustainable and heavily politicized. An analysis highlights that the removal of this subsidy, which reportedly cost the nation approximately ₦53 trillion annually, was a necessary, albeit politically contentious, decision.

“

We would have been spending about ₦53 trillion yearly on petrol subsidy if President Bola Tinubu had not removed the scheme.

The author contends that confronting the country's fiscal realities and basic economic principles is paramount, urging a move beyond political considerations when evaluating the subsidy.

“

Those that have questioned the removal of subsidy are in denial of basic arithmetic.

Historically, the subsidy was institutionalized in 1977 to cushion citizens against inflation and equalize fuel prices. While initially funded by oil boom revenues and intended as a temporary measure, it became a permanent fixture. Successive administrations grappled with the economic strain and competing national needs, yet the political implications of its removal often overshadowed economic advice. Former President Muhammadu Buhari himself questioned the subsidy's legitimacy, labeling it a "scam" and a "heavy burden."

“

The mistake was that the adoption of some of these policies became permanent.