DRAINING THE POOR TO FEED THE RICH - THISDAYLIVE

Government officials in Nigeria are actively engaged in driving progress. Across federal, state, and local levels, the focus remains on ongoing development, with officials asserting that they are diligently working to advance the economy and improve the nation. From the government’s perspective, there should be adequate food supplies, better road infrastructure, and other developments that facilitate a more comfortable life for Nigerians. In this context, the government claims that the Nigerian economy is on the path to recovery, representing its chosen benchmark for accountability.

There is no doubt that the government is taking steps to address issues, a fact acknowledged by the World Bank. Together, they justify the need to eliminate the ‘costly fuel subsidy’. While Nigeria indeed faces significant fiscal challenges, the government argues that unsustainable exchange rate distortions must end. They claim the reforms aim to restore economic stability. Officially, they state that inflation is starting to stabilize and that economic growth is trending upward, even though measuring the real impact of these changes on the daily lives of ordinary Nigerians remains a significant challenge.

Let’s take a closer look at this issue from the standpoint of the average Nigerian, the common man who faces the daily challenges posed by the nation’s current economic situation. The government’s claims of success clash strikingly with the reality of an economy that has taken a significant downturn, leaving countless people grappling with uncertainty. The much-touted recovery often feels like an added burden rather than a relief. For ordinary Nigerians, these reforms are more than just abstract economic adjustments discussed in government meetings. They show up at the dinner table through rising household expenses, diminishing purchasing power, increasing financial strain, and a growing struggle to meet basic needs. What policymakers consider economic reform translates into real hardship for many in our communities. 

This dissonance is why Nigerians are increasingly pressing for clear answers regarding the removal of the fuel subsidy. They are eager to understand who actually benefits from this policy and, equally important, who bears its immediate and disproportionate costs. It is entirely reasonable for citizens to expect the government to look beyond mere calculations of fiscal savings and address the broader economic and social implications of such policies for the people they affect.

The central issue revolves around accountability. If the government has saved significant financial resources by removing the fuel subsidy, where exactly are those savings being allocated? What happens to the funds that were spent on the subsidy? How much of that actually benefits the Nigerian people through improved public services, better infrastructure, effective social intervention programmes, or direct financial assistance? It is not enough for the government to claim substantial savings; Nigerians deserve transparency regarding how these savings are being used, their effectiveness, and, most importantly, what real improvements they bring to the lives of citizens who have borne the immediate impacts of this reform. 

Many Nigerians are yet to feel the relief promised by the government’s reforms. Instead, they are confronted with a relentless proliferation of costs, as corporations and service providers erect towering ‘cost skyscrapers’ above them. Ironically, every additional layer of cost imposed by profiteering and rent-seeking interests places a further burden on already strained households. Take, for instance, the government’s increasing taxes and levies. The channels through which direct and indirect taxation hits citizens keep expanding. The stark truth is that Nigerian consumers now shoulder a heavy tax burden at almost every transaction, every purchase, and every instance of consumption. What was marketed as economic relief often feels like just another layer of financial pressure for many households.

 In light of this situation, the government’s ability to address the financial crisis it has created seems questionable. Rather than providing credible explanations, the administration has resorted to flip-flopping and denying the evident difficulties. By refusing to acknowledge its economic missteps, it continues to declare success, while millions of citizens wrestle with deepening poverty. 

Continuing with the cost skyscraper metaphor, let’s examine the next layer: fuel. The government’s transition from subsidizing petrol to requiring consumers and businesses to pay market rates has had a dramatic effect on the Nigerian economy. Before the May 2023 reform, the government absorbed a significant portion of the gap between import costs and regulated pump prices. However, after the fuel subsidy was eliminated, petrol prices soared overnight from around ₦190 to over ₦500 per litre. For households and businesses already grappling with rising expenses, this was not just a price change; it was another substantial floor added to the already towering cost skyscraper, escalating the costs of transportation, production, distribution, and, ultimately, the basics of daily life.

Since then, fuel prices have remained unpredictable, akin to an aircraft struggling with faulty engines. Currently, Nigerians are facing petrol costs around ₦1,500 per litre. Many may not realize that these elevated prices act as an unrecognized tax on transportation, mobility, manufacturing, and commerce, despite not being categorized as official taxes. This prompts important questions: Was petrol genuinely more affordable for the average person during the subsidy era? And considering wages, purchasing power, and inflation, has the removal of the fuel subsidy improved Nigeria’s fiscal situation enough to offset the significant decline in household purchasing power? 

Electricity supply constitutes yet another layer in the cost skyscraper metaphor, imposing a heavy burden on both households and businesses. Traditionally, the government subsidized electricity by bridging the gap between generation costs and what consumers paid. However, with deregulation came the privatization of distribution companies (DisCos) aimed at creating a self-sustaining and efficient market. Now, consumers are facing much higher rates, yet they must question: have these increased costs been accompanied by noticeable improvements in electricity supply, reliability, and service quality? Is the increased cost affordable by Nigerians? If not, the added financial strain on households and businesses warrants immediate attention. 

The reality is that the challenges faced by Nigerian electricity consumers post-deregulation extend well beyond steeper tariffs. For a developing nation like Nigeria, the key takeaway is evident: moving towards market-based electricity pricing without first securing adequate power generation, effective regulation, modern infrastructure, sufficient investment, and strong protections for vulnerable consumers can lead to dire consequences. Consumers may find themselves paying significantly higher market rates while still grappling with unreliable and low-quality electricity services. This really sums up the tough situation confronting electricity consumers throughout Nigeria.

It is no secret that high electricity tariffs, unscrupulous operators, and an unstable power supply have significantly hindered Nigeria’s economic growth and national development. Yet, it seems that the financial strategists within the government have underestimated the crucial role electricity plays in developing nations. This issue goes beyond merely ensuring homes have power; electricity is a cornerstone of national progress. For Nigeria to achieve lasting economic growth, it must provide affordable, reliable, and sufficient electricity to meet the demands of its expanding population and business sectors. A stable power supply is vital for industrial growth, quality education, healthcare, modern agriculture, job creation, technological advancement, and attracting both domestic and foreign investments. Access to reliable and affordable electricity is not a luxury; it is essential for boosting productivity, enhancing economic competitiveness, and improving the living standards of Nigerians.

To secure the country’s economic future, it is imperative to focus on expanding, modernizing, and fortifying Nigeria’s electricity generation, transmission, distribution, and renewable energy infrastructure. The government must act decisively to keep electricity affordable for both businesses and households. If not, businesses may face significant financial pressure, forcing them to raise prices for consumers who are already dealing with rising living costs. In light of this, is the government truly on the right path by trying to relieve the financial burdens faced by electricity distribution companies (DisCos)? Do the facts and evidence support the DisCos’ claims for ongoing government assistance? More importantly, do their financial situations, operational effectiveness, and cost structures warrant the extent of public funding they are seeking?

Government’s persistent presentation of unsettling statistics highlighting the significant financial strain of subsidizing an already privatized electricity sector becomes wearisome. According to the Ministry of Finance, the Federal Government incurred ₦3.14 trillion in electricity subsidy costs from June 2023 to December 2025, supposedly to protect consumers from escalating electricity tariffs. Yet, the irony is glaring: both consumers and businesses are expressing frustration over arbitrary charges imposed by electricity distribution companies.

Current government policy seems to prioritize shielding private power companies from accountability rather than protecting consumers. By funneling billions in public funds to companies accused of unfair billing practices, we find ourselves in a situation where citizens pay twice: first through inflated electricity tariffs and then again through taxpayer-funded subsidies. Instead of fixing the structural issues, this approach risks socializing the costs of private enterprises while leaving the profits in their hands. Ultimately, public funds are being utilized to shield operators from the necessary regulatory oversight.

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