TD I was surprised recently when I listened to the FCT Minister make mockery of a proposal for the possible reintroduction of fuel subsidy in Nigeria. I was surprised because subsidy, in itself, is neither a crime nor necessarily bad economics. The real questions should always be: what are we subsidising, why are we subsidising it, who benefits, what does the country gain, and how do we prevent the policy from becoming another avenue for stealing public money?
Perhaps my understanding of subsidy is influenced by my years as a student in Brussels. I had the privilege of studying in Brussels, the administrative capital of the European Union, and during my Master’s degree studies, I did considerable work on the Common Agricultural Policy of the European Union — the CAP.
The CAP was always an interesting subject. It was also controversial. We discussed the huge amount of European taxpayers’ money going into agriculture. We discussed who got what. We discussed why some countries appeared to benefit more than others. We discussed the farmers, the big farms and, of course, we discussed France.
But nobody seriously suggested that because some farmers benefited from the policy, agriculture should simply be abandoned to the uncertainties of the market. Perhaps that experience explains why I find the Nigerian argument that subsidy is inherently evil rather strange.
What is the EU Common Agricultural Policy?
The Common Agricultural Policy is one of the oldest and most important common policies of the European Union. In simple terms, European taxpayers provide substantial financial support to farmers and the agricultural sector.
Why? Because Europe considers agriculture and food security too important to be left entirely to the uncertainties of the market.
The present CAP has clearly stated objectives: supporting viable farm incomes, strengthening the resilience of agriculture, improving competitiveness, protecting food security, supporting rural communities and increasingly encouraging environmentally sustainable farming. Farmers receive various forms of assistance, including direct income support and payments linked to environmental and rural-development objectives.
In other words, someone receives money from government because government believes that supporting that person or business ultimately serves a wider public interest. That is subsidy.
Yes, the CAP has its critics
Even while studying the policy in Brussels, one of the recurring criticisms was the distribution of CAP benefits. Who gets the money? Why should some farmers receive considerably more than others? Why should bigger agricultural countries and larger farms receive so much?
Those questions have not disappeared. Indeed, approximately 20 per cent of EU farms receive about 80 per cent of hectare-based direct payments. The concentration of those payments has remained sufficiently controversial that the European Union continues to debate reforms aimed at making the distribution fairer.
So the CAP is certainly not perfect. Nobody says it is. But has Europe therefore abolished agricultural support? No. Has Europe said that because some farmers receive more than others, the entire idea of supporting agriculture is wrong? Has Europe said that because private farmers make money from taxpayers’ support, subsidy has suddenly become a crime? Again, no. Instead, Europe continues to reform the policy.
That distinction is important.
What about France?
France was always part of the discussion. France has historically been one of the major beneficiaries of the CAP. But there is an obvious reason why France features so prominently in European agricultural policy: France is itself one of Europe’s agricultural giants.
France has approximately 28 million hectares of agricultural land and hundreds of thousands of farms. Its agricultural production is among the largest in the European Union. Therefore, if a substantial part of agricultural support goes to a country with one of the largest agricultural sectors, that fact alone does not establish that the policy is wrong.
Of course, questions about fairness must be asked. Questions about large farmers benefiting disproportionately must be asked. Questions about efficiency, environmental impact and the distribution of taxpayers’ money must also be asked.
But Europe has not responded by saying: because somebody is benefiting from CAP, let us abolish CAP. No. The question remains whether European agriculture benefits, whether European farmers benefit, whether rural communities benefit, whether food production benefits and, ultimately, whether the European citizen benefits from having a viable agricultural sector and reliable food supply.
That is the lesson I think Nigeria should learn.
Somebody must benefit from every economic policy
This is where our Nigerian conversation sometimes becomes unnecessarily emotional. Every serious economic policy creates beneficiaries.
Give tax incentives for manufacturing and manufacturers benefit. Reduce import duties on industrial machinery and industrialists benefit. Give agricultural credit at concessionary rates and farmers benefit. Build a railway and the contractors who build it benefit. Support domestic refining and refinery owners will benefit. Somebody must benefit.
The fact that an individual or businessman benefits from public policy does not automatically make that policy corrupt. The important question is whether his benefit produces a greater benefit for society.
If government gives an investor an incentive worth N10 billion and that incentive produces a refinery employing thousands of people, increases domestic fuel supply, reduces import dependence, creates competition and ultimately reduces the cost of energy, the proper question is not simply, “Why did this businessman get N10 billion?”The proper question should be, “What did Nigerians get in return?”
That is the question.
Apply the same thinking to fuel
This brings me to fuel subsidy. I do not advocate returning NNPC to its old monstrous role. No. We have travelled that road before and we know where that road led us.
Government should not recreate an opaque system under which petrol is imported, figures are manufactured, subsidy claims are presented and Nigerians are left wondering whether ships that never arrived somehow discharged millions of litres of petroleum products. That is not the subsidy I am talking about.
NNPC is already a public entity. It cannot and should not be returned to that old monstrous duty. The discussion should now be about supporting domestic production.
Nigeria needs refineries. Nigeria needs more refineries. Nigeria needs competition among refiners. Nigeria needs to reduce its exposure to imported petroleum products. And if we agree that these things are important, why should government not deliberately encourage businessmen to build refineries?
Why?
Government can support qualifying investors through transparent incentives. That support could come through tax concessions, infrastructure or access to finance. It could even come through crude oil supplied at a clearly defined concessionary price, provided there are enforceable obligations regarding domestic production and supply.
Yes, those refinery owners will benefit. Of course they will. Why would a businessman invest billions of dollars if there is no reasonable expectation of profit? But Nigerians should be the bigger beneficiaries.
That is the point.
Subsidise production, not corruption
There is an enormous difference between subsidising productive capacity and subsidising corruption. If Nigeria decides that increasing domestic refining capacity is a strategic national objective, government can design a transparent programme available to every refinery that satisfies predetermined conditions.
Tell us the quantity of crude supplied. Tell us the concession being granted. Tell us the monetary value of that concession. Tell us how much refined product must be supplied domestically. Tell us the duration of the incentive. And tell us the beneficiaries.
Publish them. Let Nigerians know. Then Nigerians can determine whether we are getting value for our money.
That is completely different from creating an opaque arrangement through which politically connected people submit papers and collect billions from government. That was part of our problem.
Subsidy is not the crime. Using subsidy as a decoy for stealing is the crime.
Fuel is at the centre of Nigeria’s present crisis
This debate cannot be treated casually because fuel is not an ordinary commodity in Nigeria. Fuel moves the bus. Fuel moves the truck carrying tomatoes from the North to Onitsha. Those tomatoes you find in Afor Ukpor, Orie Akpu Ozubulu or even in Eke Amangwu in Umudim Nnewi are moved by machines moved by fuel. Fuel moves the trader. Fuel powers the generator in the barber’s shop. Fuel enters the cost of manufacturing, the cost of food and school transportation. Fuel enters almost everything.
When the price of fuel goes up, the bus driver adjusts. The trader adjusts. The farmer adjusts. The manufacturer adjusts. The school adjusts. The landlord eventually adjusts. Everybody adjusts.
But there is one person who cannot easily adjust: the ordinary Nigerian whose income has remained almost the same. That is the person government must remember.
The removal of fuel subsidy was part of the economic reforms introduced in 2023. The government continues to tell us that those reforms were necessary to stabilise public finances. Maybe. But Nigerians also know what happened afterwards.
They know what they pay to enter a bus. They know what they pay for food. They know what it costs to run a generator. They know what it costs to send their children to school. They know what is left from their salaries at the end of the month. Those are also economic statistics.
Therefore, resolving the energy-cost problem is not optional. It is a must.
Let the 2027 candidates speak
This is why I am looking forward to hearing from those who want to govern Nigeria in 2027. Everyone must speak out.
In 2027, Nigerians must be energised through the campaigns to take back their country by candidates focusing on the real issues affecting their daily lives.
I am sure many Nigerians have heard and formed their opinions about the controversies surrounding Asiwaju Bola Ahmed Tinubu. They have heard the stories about his past in the United States and the drug-related forfeiture controversy. They have heard the questions about whether his origins are in Lagos or Osun State. They have heard the arguments over his primary and secondary school records, his age and the continuing speculation about aspects of his early identity.
These controversies will certainly remain part of our politics. Nigerians will talk about them, politicians will talk about them and social media will talk about them. And where legitimate questions remain unanswered, Nigerians are entitled to continue asking questions.
But what will make the most impact on the ordinary Nigerian is connecting the leadership of this government, and its real or perceived failures, to the suffering he encounters every morning.
How much was a litre of fuel when this government came into office and how much is it today? How much did it cost to enter a bus? How much was a bag of rice? How much did it cost to move those tomatoes from the North to Afor Ukpor, Orie Akpu Ozubulu or Eke Amangwu in Umudim Nnewi? What happened to electricity, the naira and the purchasing power of salaries?
Those questions enter people’s homes and speak directly to their daily experiences.
Sadly, many Nigerians already believe that ALL POLITICIANS are dishonest. And as if anybody needed evidence to strengthen that unfortunate perception, very smelly stories from the respective party primaries are already oozing out. So merely telling Nigerians that one politician is dishonest may no longer be enough. The Nigerian listening to you may simply ask: which of them is not?
That is the danger. Therefore, while Nigerians may be entertained by the discrepancies and controversies surrounding Asiwaju’s history, the opposition must not allow those controversies to become a substitute for discussing the issues that determine whether Nigerians can eat, work, travel, educate their children and keep their businesses alive.
Talk about his record, talk about his policies and talk about their consequences, but importantly, tell Nigerians what you will do differently. That is where the campaign must eventually lead.
If you believe subsidy should never return, tell Nigerians what you intend to do about the cost of fuel and its consequences throughout the economy. If you believe some form of subsidy should return, explain exactly what you intend to subsidise.
Is it consumption, production, crude supplied to domestic refineries or transportation? How much will it cost? Who qualifies and for how long? What safeguards will prevent abuse? And most importantly: how will the ordinary Nigerian benefit?
That is how an opposition earns the confidence of people who have become suspicious of virtually everybody in politics.
The 2027 campaign should therefore not merely be about why Asiwaju should leave. It must equally be about what comes after Asiwaju. What will you do about fuel, food, electricity, jobs and the naira? What exactly will you do differently from the government you are asking Nigerians to remove?
These are the conversations we should be having. Making mockery of the word subsidy does not answer these questions. Mockery will not reduce transport fares, reduce the cost of food, build refineries or make life easier for Nigerians.
We need answers.
The lesson from Brussels
Whenever I remember those discussions on the Common Agricultural Policy during my studies in Brussels, I remember that nobody presented the CAP as a perfect policy. It wasn’t. It isn’t.
We discussed its imperfections. We discussed the distribution of the money. We discussed the bigger farmers. We discussed France. And the debate continues today.
But Europe did not abandon the fundamental idea that government can intervene strategically in an important sector of the economy because some farmers benefit more than others. France remains one of Europe’s biggest agricultural economies and naturally features heavily in the CAP system.
French farmers benefit. Other European farmers benefit. Agricultural businesses benefit. But Europe asks a bigger question: Does Europe benefit?
Nigeria should ask the same question.
If supporting Nigerian businessmen to build refineries will create competition, increase domestic production and ultimately make fuel cheaper for Nigerians, then let businessmen benefit. Somebody must benefit. But let Nigeria benefit more.
Let the bus driver benefit. Let the civil servant benefit. Let the farmer who transports his produce benefit. Let the manufacturer benefit. Let the woman taking her children to school benefit. Let the young man struggling to keep his small business alive benefit. Let the average Nigerian benefit.
That should be the ultimate test of any subsidy policy. Not whether somebody made legitimate money from it. Not whether somebody can shout “subsidy!” and remind us of yesterday’s corruption. Not whether a politician can score cheap political points by laughing at the proposal. But whether the policy makes life better for Nigerians.
*LSubsidy is not a crime. Corruption is.
And as we approach 2027, those asking Nigerians for their votes must tell us how they intend to deal with the fuel crisis and the wider cost-of-living disaster confronting the country.
We have heard enough slogans. We need proposals. We need alternatives. We need details. Everyone must speak out.
Obunike Ohaegbu writes from his village in Ukpor, Anambra State.
