I watched the address of President Tinubu to members of NEC of APC on 26th February, 2025 where he took pride in his first act in office which was the removal of fuel subsidy. He rightly observed one positive outcome of his decision, which is the release of more funds to States from the Federation account.
The decision to remove fuel subsidy was made long before Tinubu emerged as President. In 2012, Tinubu as national leader of the opposition Action Congress led national protests in opposition to the subsidy removal by Dr. Goodluck Jonathan where he accused the then President of breaching his social contract with the people with what he described as “Jonathan tax” thereby subjecting the people to misery. This protest led to many deaths and destruction of properties and other losses for individuals and organizations. The protests also formed the rallying point for members of the opposition parties especially CPC, ACN and ANPP which led to the birth of APC. In taking his decision in 2023, President Tinubu did not explain to Nigerians what has changed between 2012 when he vehemently opposed subsidy removal and 2023 when he became President.
Unlike President Goodluck Jonathan whose decision came after months of consultations with different stakeholders and the general public, Tinubu’s action on subsidy removal took Nigerians by surprise and made petrol to rise from N189 to N500 in one day with significant shocks across all sectors of the economy. President Goodluck Jonathan’s Subsidy Reinvestment and Empowerment Programme (SURE-P) launched on February 13, 2012 to cushion the effects of subsidy removal targeted the most vulnerable groups and had deep penetration to the nooks and crannies of the country. On the other hand, President Tinubu’s major policy in that regard is the CNG initiative, which has witnessed very low cross-country penetration.
Due to the near absence of a clear programme to address the challenges associated with subsidy removal, the President takes prides in the increased allocations to the states from FAAC. While this is an obvious outcome of the subsidy removal, it leaves the question of what has happened to the increased allocation to the Federal Government which takes the lion share (52%) of the Federation account. At least, for Benue State, one can point to visible projects in the areas of road construction, upgrade of public transportation, subsidies on agricultural inputs and mechanization, upgrade of facilities in public primary schools, upgrade of tertiary healthcare (BSUTH), urban renewal especially with street lights and beautification of roundabouts and other public spaces as well as welfare of civil servants and pensioners.
Another angle to look at the celebration of increased FAAC is that, the increase is due largely to the floating of the exchange rate which is another flagship policy of Tinubu’s Government. This policy caused massive devaluation of the Naira from N460 to a Dollar in May 2023 to N1,475 in January 2025. This situation led to an increase in money supply in the domestic economy, significantly reducing the purchasing power of the Naira.
Therefore, beyond the celebration of increased money supply to states, we need deliberate policies from ALL TIERS of Governments to cushion the effects of subsidy removal and the floating exchange rate. Let our President take the necessary steps please. We are waiting even as low income Nigerians continue to bear the brunt.
Dr. Peter Terngu Anule
Makurdi
