TD I was privileged to live and study in the United Kingdom, and that experience gave me the opportunity to observe, beyond textbooks and political speeches, how a developed capitalist society manages the relationship between market forces and the welfare of its citizens. I have since had cause to look again at that experience whenever the question of subsidy is discussed in Nigeria. Sometimes I wonder whether those of us who have lived abroad have actually helped to confuse the subsidy debate back home.
From London, Manchester or Birmingham, it is very easy to lecture Nigerians about the beauty of market forces: remove subsidy, allow the market to determine the price, government has no business subsidising consumption, and Nigerians must learn to pay the real cost of things. Beautiful economics, except that the country from where many of us deliver these lectures does not quite practise the naked economics we preach to Nigerians.
Britain certainly does not generally subsidise petrol at the filling station. If that is the argument, let us concede it immediately. But Britain subsidises people, and therein lies the difference. If you lose your job there and meet the applicable conditions, government pays you cash. If your earnings are low and you qualify, government pays you cash. If you struggle with housing costs and qualify, government contributes towards those costs. If you have children and meet the applicable requirements, there is financial support. If you care for a disabled family member, whether your wife, husband, son, daughter or another qualifying person, government may pay you for the job of caring. If you become disabled yourself or grow old without sufficient income, there are systems designed to provide financial support.
There is Universal Credit. There is Housing Benefit in applicable cases. There is Child Benefit. There is Pension Credit. There are disability benefits, support for carers, Council Tax Reduction, free school meals for eligible children and childcare assistance. Then there is the NHS, built around a remarkably simple principle: access to healthcare should depend primarily on clinical need rather than the size of the patient’s bank account.
Even transportation provides another illustration. In London, children under 16 can enjoy free or heavily subsidised travel subject to the applicable Transport for London rules, while qualifying London residents aged 60 and above can also enjoy free travel through the 60+ London Oyster photocard, subject to the scheme’s conditions and time restrictions. The passenger does not personally pay the full economic cost of providing that journey. Somebody absorbs it.
Call these things welfare, social security, public services, concessions, government intervention or whatever makes the economics textbook happier. The point remains that somebody is paying so that the individual citizen does not bear the entire market cost alone. In my view, that is subsidy.
Britain also operates the Warm Home Discount scheme, under which eligible households can receive assistance with their electricity bills. Britain believes in the market, but apparently the market has not prevented it from recognising that citizens can fall into energy poverty and may require government intervention.
Then there is Child Benefit. The British government does not tell a struggling mother that giving her Child Benefit will distort the market and that she should allow market forces to raise her children. Government accepts a simple proposition: there are circumstances in which leaving citizens completely exposed to market forces produces unacceptable social consequences.
That is the point Nigeria keeps missing. We appear to have imported only one chapter of the economics textbook: remove subsidy and allow market forces to work. We forgot the next chapter, which is to protect the vulnerable. We remembered market pricing but forgot social protection; we remembered fiscal savings but forgot the human being from whose pocket those savings ultimately came.
Whenever I read some of the arguments about “economic forces,” “market forces” and “cost-reflective pricing” from professional commentators and media advocates of subsidy removal, my stomach cramps. I sometimes ask myself: do they actually understand what this discussion is all about?
The argument is not whether market forces exist. Of course they do. The argument is what a responsible government does to protect its citizens from the consequences when those forces suddenly multiply the cost of the energy upon which virtually every aspect of their lives and livelihoods depends.
In May 2023, Nigeria removed petrol subsidy. We were told it was necessary, unsustainable and consuming trillions of naira that could be invested elsewhere. We were told smugglers were benefiting and that wealthy Nigerians with several cars gained disproportionately from a subsidy supposedly intended to help everybody. Some of those arguments were valid.
I am therefore not campaigning for the resurrection of every corruption-infested subsidy invoice that once passed through Abuja. My question is much simpler: after removing the subsidy from petrol, what did we put in the hands of the Nigerian?
Where is our own share? What did we get?
That, for me, remains the question at the heart of the subsidy debate.
Obunike Ohaegbu, NDC aspirant for Nnewi North/Nnewi South/Ekwusigo Federal Constituency, writes from his village in Ukpor, Nnewi South LGA, Anambra State.
