Spending on petrol subsidy is unconscionable

Recently the federal government through the minister of state for petroleum resources, Ibe Kachikwu, reported that its annual expenditure on fuel subsidy has risen to over N1.4 trillion. Going by the figures, it means about N3.76 billion is spent daily on subsidizing petrol. For the records, it is also a staggering 386 per cent higher than the earlier figure of N774 million daily given on March 5, 2018 by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, for the importation and distribution of petroleum products in the country.

What rational and sensible government could afford to leave millions of its citizens in poor health, ravaged by avoidable diseases such as malaria, yellow and Lassa fever, cholera, typhoid etc while it continues to spend billions of dollars and trillions of naira yearly to subsidize consumption of petrol by the rich and the middle class? Despite Nigeria being a signatory to the World Health Organisation recommendation for every government to spend at least 13 percent its annual budget to health, Nigeria has not allocated more than 6.57 percent of its budget to the health sector. A good example is the 2018 budget where only N340.45 billion, representing 3.9 percent of the N8.8 trillion expenditure plan, was allocated to the health sector.

It took a Bill Gates recently to remind the Nigerian government of global statistics we are all aware of – that “Nigeria is one of the most dangerous places in the world to give birth, with the fourth worst maternal mortality rate in the world, ahead of Sierra Leon, Central African Republic, and Chad,” and that “one in three Nigerian children is chronically malnourished.”

What rational government with a modicum of conscience will spend over a trillion naira yearly on frivolous consumption of petrol that adds very little to the economy while allocating only a meager N605.8 billion to education in a country of nearly 200 million people with a clear majority young population desperately in need of education? What country with a sensible government will be happy allocating far more to its consumption of fuel than educating and developing its future workforce and human capital?

We believe there can no longer be any rational or sensible explanation for the humongous amount of money spent daily on subsidizing the consumption of petrol to the detriment of other critical sectors and needs in society. Petrol is a commodity like any other that is best left to market forces of demand and supply. The little political capital derived from maintaining the huge and extremely corrupt fuel subsidy regime is not commensurate with the long-term damage that is being done to the economy, growth and development of the country by that wasteful expenditure. Nigeria cannot afford to be travelling down an escalator that is clearly going up.

The government needs to summon up the political courage or will and finally do away with the subsidy regime. The money lost through that scheme can go a long way in transforming the existential realities of many Nigerians.

We totally agree with billionaire philanthropist, Bill Gates who surmised that any government that invests in health, education, and opportunities (human capital) is laying the foundation for sustained prosperity of that country. Any country, however, that priorities other issues, like Nigeria is currently doing with fuel subsidy, will realize, sooner or later, that there will be a sharp limit on how it can grow.