Former Senator representing Ekiti North Senatorial District, Ayo Arise, under the All Progressives Congress, has rejected calls for Nigeria to return to the former fuel subsidy regime, describing such a proposal as economically retrogressive, warning that it could undermine the financial gains accruing to governments from the removal of subsidy.
Arise made this remark after the former Vice President and Presidential Candidate of African Democratic Congress, ADC, Atiku Abubakar promised to return to the subsidy regime if elected president in 2027.
The former lawmaker argued that the removal of fuel subsidy, despite the initial hardship and economic pressures, had significantly improved the financial capacity of both the federal government and the states, enabling them to meet their obligations and invest more in development.
Arise said those advising the former vice president might not have adequately presented the broader implications of returning to the old subsidy regime, saying the benefits of the subsidy removal should be assessed beyond the immediate increase in the cost of living.
He also cited the ability of governments to meet their salary obligations without repeatedly seeking loans or financial assistance from the national purse as one of the often-overlooked benefits of the policy.
Arise explained that regular salary payments had implications for the wider economy because workers who receive their wages on time were better able to meet household obligations, pay school fees and purchase goods and services.
The All Progressive Congress, APC, Chieftain equally attributed a substantial portion of the additional resources now available to governments to the removal of subsidy, arguing that the funds could be redirected towards critical areas of development.
His words, “I would imagine that the former VP’s advisors have not done him any favour. Look, you now have a government that has sufficient funds without any form of interruption to pay salaries, as I told you, without running to the federal government to ask for any sort of loans, to pay salaries. Some of this is being taken for granted.
“But in the past, when salaries were not paid, those who are salaried will not be able to actually buy little things that they need. They can’t pay school fees as it were in the old days.
“Even if you give them loans, like credits, they will not be able to meet their obligations. So it actually comes down to the fact that if people don’t have the buying power because they’re not paid on time, now it has consequences beyond what one can easily explain. Because those things are no longer happening. It can be taken for granted.
“But the money for all this to be happening came from the subsidy removal. And here is the government that says whatever money we have recovered from looting, we are going to direct most of it to the NELFund to be able to pay school fees by those who ordinarily would have dropped out of school due to lack of ability, you know, for their parents to pay.
“So once some of this is taken in aggregate, we now look at it: what is the downside of a subsidy removal that will advise the person to say that we want to go back to that regime?
“The regime of total mismanagement, of corruption, of siphoning our resources outside, people coming in saying that they have imported oil, they just bring papers, you pay them subsidy without anything coming to Nigeria.
“They are vetting those things to the West African countries. These are some of the understandings, I believe, a good advisor would have presented to his principal before such utterances could have come out.”