May 29: The Effect of “Subsidy is Gone” Declaration by Tinubu

A year has passed since President Bola Tinubu stood at Eagle Square in Abuja and declared, “Subsidy is gone.” During his inaugural address, shortly after being sworn in as Nigeria’s 16th President, Tinubu clarified that the era of fuel subsidies in Nigeria is over, asserting that the national budget will reflect this change from June 2023 onwards. 

Has removing the fuel subsidy delivered the promised economic benefits, or has it plunged the populace into deeper economic hardship?

When President Tinubu announced the end of fuel subsidies, it was with the promise of ushering in significant economic reforms aimed at achieving at least six percent GDP growth annually. “In economy, we’ll target not less than 6 percent growth in GDP growth,” were his words, with plans to boost domestic manufacturing and cut down on imports. 

Yet, the practical outcomes of these ambitions are up for debate. Has the Nigerian economy felt these reforms’ positive impacts, or have real-world challenges overshadowed theoretical benefits?

The immediate aftermath of the subsidy removal saw a sharp increase in fuel prices, which inevitably led to higher costs for transportation and goods. A year later, how have ordinary Nigerians adjusted to these changes? Is the average citizen better off now, or has the cost of living surged beyond manageable levels? 

With the government’s pledge to lead with “compassion and amity towards all,” one must question whether these principles have materialized into effective policies that cushion the economic shocks experienced by the masses.

Foreign Investment – Expectations vs. Outcomes

One of the cornerstone promises of the Tinubu administration was to attract more foreign direct investment by resolving the issues of multiple taxations. “To our foreign investors, our government will review all complaints about multiple taxations,” Tinubu had assured. 

A year into these reforms, has Nigeria seen an influx of foreign investment? Are international businesses more inclined to invest in a Nigeria free from fuel subsidies, or do concerns about the economic stability and policy consistency remain deterrents?

As we reflect on the year since the subsidy was removed, it’s crucial to assess whether this policy shift has been a stepping stone toward economic stability or a stumble into fiscal instability. The government’s intentions were clear, but the execution and the ensuing economic realities might tell a different story.