Behind every problem is the cause of the problem. To solve the problem we must first deal with the cause. Various causes are behind Nigeria socio-economic problems, but Nigeria leadership systems have mostly concerned themselves with the manifestations of the deep seated problems.
Before and shortly after independence Nigeria operated a productive economic system.
The climatic differences of the Northern and Southern parts of the country determined the type of product from each zone. Trade in palm oil and kernels had started by 1850 in the coastal riverine areas. In 1874 cocoa was introduced to Nigeria from Fardinando Po. Later it became the most important export crop of Western Nigeria and the source of their wealth.
Wild rubbers were tapped before rubber plantation were established in Benin and Sapele in 1955. Western Nigeria established rubber processing factory in Benin. Groundnuts and cotton were the most important crops in the Northern parts of the country. In 1909, the new type of cotton from North America was introduced.
The railway line was also extended to Kano for easy transportation of groundnut and cotton to the coast. Northern Nigeria was also known for groundnut and pyramids which are not seen today.
Causes Of Nigeria Socio-Economic Problems
The easily discernible cause of Nigeria problem, is of course the oil revenue.
Every region was content with their natural endowment and tried to develop and exploit their resources to their maximum potentials, for the benefit of their regions.
But, as soon as oil was explored and its potentials for enormous wealth realized, all attention shifted to who gets the lion share of the wealth. No doubt, oil was seriously implicated in the Nigeria civil war 1966-1970.
It was responsible for elongating the war period and for ensuring that the rebellion was crushed, since the oil wealth of the country exists in the then Biafran territory.
The oil sector and revenue from oil, became the definer of socio-economic and political mainstay of the country. And, this has remained the situation to the present time.
The Debacle Over Oil Subsidy Removal
The first issue of oil subsidy removal came up during former President Goodluck Jonathan regime in 2012, without prior warning to the citizenry. Government argued the removal will free up fund for other public services as health and infrastructural services, and the liberalization would benefit the economy.
Most Nigerians rejected the removal which they viewed as one of the few benefits they received from government widely viewed as corrupt and inefficient. The quick rise in consumer prices caused by the removal started manifesting everywhere. Fuel prices rose from N65 to N141 naira per liter. Transport fares doubled, food price rose twice their original cost. For more than five months the argument over the removal of the subsidy inundated the news media, with government plan on the removal of the subsidy not relenting.
A source in the presidency said “The President has made up his mind on the subject of fuel subsidy removal: to him it is time a Nigeriam leader makes the hard decision on deregulating the downstream industry and the president has made that decision”.
Other key government officials including the Governor of CBN, Sanusi Lamido, the minister of finance Okonjo Iwuala, amongst others have thrown their weight in support of the presidency.
One issue that arose then, was for contribution by all and sundry on best application of the subsidy fund by the presidency. Numerous persons provided very useful contributions regarding to this.
Demonstrations against the removal of fuel subsidy began on 3rd January 2012, in Lagos, Abuja, Kano and later spread to other state capitals. This was aggravated by a general strike by various unions and organizations. This forced the presidency to respond to the pressure by partially reinstating the fuel subsidy. On 29th May 2023, during the swearing in of President Bola Tinubu, the fuel subsidy was once again removed without warning. It happened the day president Tinubu was making his inaugural speech.
This came as a big surprise to everyone following the negative fallouts from former president Goodluck Jonathan’s subsidy removal, no one expected a repeat of the outcome. Within one week cost of all commodities in the country jumped up; fuel, transportation, food items,
services, etc. The quick rise in consumer prices caused by the subsidy removal generated unpopularity of the administration and agitation by various organization for subsidy restoration began, and has continued to date.
Best Application of Subsidy Fund
As Nigeria continues to contend with challenges of mono-economy revolving around one source of revenue, the question of best application of subsidy fund when removed is yet to be satisfactorily addressed. The concern of the citizenry over fund recovery is usually about the profligacy of the government in the utilization of such fund. With the unabaiting trend of corruption and embezzlement in high places, the masses have good reason to worry and to believe that it will be looted by a privileged few, living them poorer than before.
What the people need therefore, is a convincing assurance that the fund will be channeled for bettering the lot of present and further generation.
This question arose during former President Goodluck Jonathan regime, and is still relevant in the present Bola Tinubu regime. With the escalation of the impact of fuel subsidy removal, government need to come up with an appeasing option that will sooth the temper of the masses. As earlier stated, every problem has an underlying cause. We are currently dealing with manifestations of a mono-economic system.
An economy that depends solely on oil revenue. Whatever happens to the oil revenue affects the entire system. Subsidy is part of the oil revenue that the masses have been enjoying all along. It can be said that the increase in the cost of goods and services following the removal of the subsidy equals the amount of the subsidy that the masses have been enjoying. Subsidy has therefore become ingrained in the life style of the masses and also become a sensitive aspect that requires caution before any administration should tamper with it.
Subsidy removal being a very sensitive issue requires carefulness in its execution such as:
1. Sensitization of the masses on government intention and reasons for carrying out the removal, which will enable the people to prepare as well as lessoning the shock engendered by the process.
2.Subsidy removal should be a gradual process and not one at a time removal, in order to enable the masses to cope with the aftermath.
3.The masses need to be carried along by their observing every detail of what the subsidy fund has been turned into.
Provision of Rail Network
One good application of the subsidy fund that will receive the acceptance and cooperation of the masses is in the provision of rail network all over the country.
Benefits of Rail Network
1.Reducing the pressure and cost of roads infrastructure building and maintenance
2.Recovery of fund otherwise spent on fuel consumption
3.Reducing the carnage on highways caused by road accidents
4.Reducing the cost of vehicle importation and maintenance
5.Enabling easy transportation of the citizens around the country at low cost.
6.Contributing to global action on climate change mitigation
7.Ultimately, recovery of fund for various government projects and programmes.
Thanks for reading.
Elder Dr. Udegbunam Nwolisa
Nze Millienweilo Dikeezeakaa
CEO, Lison Consult Ltd.
