May 24, 2024

Dangers of power subsidy removal


WITH a few days to the first anniversary of the President Bola Tinubu administration, the Federal Government has a great opportunity to have another look at its draconian economic policies which, in our view, have harmed more than helped the economy.

In rapid succession, the Federal Government implemented petroleum subsidy removal, abolished the naira exchange rate differential, removed the subsidy on electricity, while the Central Bank of Nigeria, CBN, imposed a 0.5% levy on electronic transfers, among other measures meant to extract revenues from the dry pockets of Nigerians.

The petrol subsidy removal was imminent because all the three major presidential candidates – Tinubu, Atiku Abubakar and Peter Obi – had pledged to implement it. While Atiku and Obi came from the old Peoples Democratic Party, PDP, background which had always believed in the subsidy removal, Tinubu’s APC had mobilised opposition against it but turned around to implement it when it assumed power.

Nigerians were still reeling from the hurt of the petrol subsidy removal and naira collapse when the Minister of Power, Adebayo Adelabu, also slammed the controversial removal of electricity subsidy. Consumers were classified, and the best supply of available power apportioned to the highest bidders – the so-called “Band A” customers. This category of metered customers was to pay N225 per kilowatt hour, kwh, up from the former N68kwh – more than 300 per cent rise.

Organised Labour has already commenced picketing of the premises of the Nigerian Electricity Regulation Commission, NERC, and power companies nationwide. Unlike their earlier seeming half-hearted efforts to confront the Tinubu government’s harsh economic policies, the picketing was well received by the populace who have virtually been bled dry in the name of economic policies.

Many economic experts fault the Tinubu government’s approach on two major fronts. These measures seem to be a close compliance with prescriptions of the International Monetary Fund, IMF, and World Bank, WB, which have called for the abolition of all subsidies, especially on petroleum and power. Tinubu is an enthusiastic shopper for foreign investors, and is convinced that complete subsidy removals will bring them in droves.

The second ground of disagreement is that this regime has remained profligate in the spending of public resources with overload of ministers in the Tinubu cabinet, allocation of N90bn to hajj pilgrimage and sumptuous allocations to the three arms of government in the current national budget.

The Tinubu government seeks to dodge “bankruptcy” by shifting the same to the people. This is unacceptable. The subsidy on electricity must be maintained. Government owes it to Nigerians. Local investors, manufacturers and businesses cannot be sacrificed for foreign investors. They, especially small businesses, need reliefs like the power subsidy, to survive. If everyone is chased out of business, where will the economy be?

We say no to power subsidy removal.