THE International Monetary Fund, IMF, feels entitled to plug Nigerian leaders with constant advisories on how to run our economy and society because we are always running to borrow from it. History has, however shown that the IMF and its Bretton Woods twin, the World Bank, are more concerned in propagating their neo-colonialistic interests than caring for the welfare of the populace in the Third World, Nigeria inclusive.
On the other hand, the primary constitutional obligation of government in Nigeria as elsewhere is the security and welfare of its people. This is where renowned social crusader, Mr. Femi Falana’s call for the government of President Bola Tinubu to ignore the IMF call for total removal of all subsidies (especially that of electricity) gets its relevance, and our support.
The IMF advice is akin to giving the Tinubu government a rope to hang itself with, given the possible outcome of such a move at this juncture of extreme hardship in the country.
Because of the poverty-breeding structure of the Nigerian economy, the moves to fully commercialise the electric power market has not succeeded. As a result, the Federal Government is forced to pay some money through the Nigerian Bulk Electricity Trading Company, NBET, to make up for the shortfall from what the power companies are able to scrape from their public billings.
For instance, in 2023, the power companies were able to collect N783 billion tariffs whereas their total bill was N1.06 trillion. The Federal Government had to pay N375 billion subsidy to make up for the shortfall. If the subsidy on power is to be removed at this time, consumers will have to pay over 35 per cent more than they currently do. They will also have to contend with capricious tariff increases that the power companies have been bristling to impose.
Though the argument is made that full deregulation will open the field for investors to come in, experiences have shown that Nigeria does not work quite like that. Almost one year after the full removal of petrol subsidy, the Dangote and government refineries expected to vitiate the astronomical cost of petroleum products have failed to do that.
Removal of power subsidy now will be too much for the suffering Nigerian masses to bear. Already, the removal of petrol subsidy has pushed many manufacturing and service enterprises out of business, especially as the value of the Naira has gone down the drain. It may become the proverbial final straw that breaks the camel’s back. The pockets of protests which the Tinubu government believes are sponsored, could become unmanageable.
Subsidy is a way of life, even in the developed, capitalist economies. Without welfare for the people, government loses it relevance.
For now, and the foreseeable future, the power subsidy must stay.
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