I’ve been racking my head for some time now to really decipher what exactly is wrong with the Nigerian subsidy on fuel that it should be removed. I have also seen people who together, we vehemently rejected and protested against the removal of fuel subsidies, now defending same thing we resisted some years ago, and the reason for their turn around is still not clear to me. Please I need someone that is more knowledgeable to kindly explain to me.

Let me make my point, then you can clear my ignorance. It is basically the IMF and the World Bank, that are pushing the zero subsidies theory in Africa, particularly Nigeria. These institutions want subsidies to go in Africa. But a cursory glance at the economies of the countries who own and control the IMF and World Bank, (US, UK and EU), shows they are heavily subsidized to stabilize living for their own citizens.

Public information show that $665 billion, that’s about 11 percent of the United States federal budget in 2022, was designated for subsidies. The US still pay Export subsidies, Agriculture subsidies, Housing subsidies, Healthcare subsidies and Oil subsidies. The Environmental and Energy Study Institute found that the US government alone spends $20 billion every year on direct fossil fuel subsidies. Of that figure, around $16 billion goes towards oil and gas, while the remaining $4 billion benefits the coal industry. In 2021, the US federal government, provided $28.5 billion in Agriculture subsidies, for direct farm program payments.

In the UK, several sectors benefit from government subsidies. Health insurance, technology, housing, education, electric vehicles and sustainable solutions. According to UK government grants statistics, around £258billion was spent on subsidies in 2020/21. £2.4billion was spent on the Sustainable Farming Incentive, with £1.65billion in direct subsidies awarded to farmers in 2021/22. In other to keep average household energy bills below £2,500 a year, the UK government is still paying out direct energy subsidies that analysts forecast will cost £38-£42billion in 2023. A research, commissioned by the Liberal Democrats, found that the UK government has given £20billion more in support to fossil fuel producers than those of renewables since 2015. While renewable energy was given £60billion in support over that time, fossil fuel companies were given close to £80billion.

Between 2008 and 2019 EU member States provided €55 to €58billion per year of explicit subsidies for fossil fuels. In 2019, Germany alone spent approximately €5.4billion, on fossil fuel subsidies. And in 2021, EU member States, collectively spent approximately €4billion on fossil fuel subsidies and approximately €3.5billion on same in 2020.

These are nations with strong economies and centuries of dependable social security safety nets. They still refuse to expose their citizens to the unpredictable vagaries of market forces. Their lives are still subsidized. Algeria, Azerbaijan, Bahrain, Ecuador, Iran, Kazakhstan, Kuwait, Malaysia, Oman, Qatar, Saudi Arabia, Turkmenistan, United Arab Emirates, and Venezuela, are all oil producing countries with subsidy regimes for their people. In fact, some of these nations subsidize everything including the cost of marriage for their citizens.

So in Nigeria, when I hear people say subsidy must go, what exactly is the problem with our own subsidies that they must be removed even if the citizens have to choke to death? Is it the subsidies that are a problem or the unwillingness of successive governments to fight corruption in the subsidy regimes? Should the citizens who are barely surviving by each day, be made to pay for the refusal of government to fight corruption in the administration of subsidies? What exactly is our government doing for us if everything must be determined by the whims of market forces?

I sincerely and honestly need someone to help me out of this quagmire because I am deeply confused and getting mad.

Yours sincerely,
Citizen Agba Jalingo.

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