A More Comprehensive and Strategic Approach to Removing Fuel Subsidy in Nigeria.

?“Without a strategy, execution is aimless. Without execution, strategy is useless.” Morris Chang.

Recently, Nigerians have gone through the worst periods in all her history. The oil subsidy removal has brought untold hardship on poor Nigerians especially. And the government doesn’t seem to understand what is going on now. The labor union is threatening a nationwide strike action against subsidy removal. What is the way forward is the question that comes to mind now. This is my small attempt to help the this administration deal properly with the removal of the subsidy. ?

Removing fuel subsidy in Nigeria requires a strategic approach to ensure a smooth transition and minimize adverse impacts on the economy and population, and this where the previous and present government failed when it comes to subsidy removal. It is clear and unarguable that most Nigerians agree and understand that subsidy removal is a thing we must do, period! It is a good thing to do. But how do we do it? What is our strategy to removing this thing called fuel subsidy? The approach has always been the problem. Present and previous government have shown low capacity or zero capacity to solving the problem. And this is why without a strategy, execution is aimless and without execution strategy is useless.

?So, here are some steps to consider:

1. Conduct comprehensive research and analysis:

The government should gather data and conduct an in-depth analysis of the fuel subsidy system in Nigeria, including its costs, benefits, and various stakeholders involved. Identify the challenges, risks, and potential opportunities associated with its removal. The question here is whether the government has done the above, I doubt if they have done this. I don’t believe the government of the day or the past government carried out due diligence to understand the problem at hand. ?

2. Develop alternative policies:

Based on the research and analysis, formulate alternative policies to replace fuel subsidies. Focus on improving the efficiency and transparency of the energy sector, such as promoting renewable energy sources, diversifying the economy, and investing in infrastructure for mass transportation.

3. Create public awareness and consensus:

Communicate the reasons for removing fuel subsidies to the public, highlighting the economic, social, and environmental benefits. Conduct awareness campaigns and engage with different stakeholders, including political leaders, business associations, consumer groups, and civil society organizations, to build consensus and obtain support for the change. This has not been done comprehensively in Nigeria.

4. Implement gradual and phased removal:

Rather than an abrupt removal, implement a gradual and phased approach to ensure a smooth transition in the removal process. And let me say here that subsidy removal should be seen as a process, a journey not one-day event. Nigeria’s government should set a timeline for reducing the fuel subsidy gradually over several years, with predetermined benchmarks and a monitoring system to track progress.

?5. Provide targeted compensatory measures:

Mitigate the potential negative impacts of subsidy removal by designing targeted compensatory measures for vulnerable groups. For example, allocate funds for social safety net programs, such as direct cash transfers or subsidized public transportation, to support low-income households and alleviate any sudden increase in fuel prices. Nigeria’s government also failed to do this.

6. Strengthen regulatory frameworks:

Strengthen the regulatory frameworks governing the energy sector to promote competition, transparency, and efficiency. Implement reforms to tackle corruption, improve tax collection, and enhance governance in the sector to prevent price manipulation or market distortions.

7. Enhance energy efficiency and domestic refining capacity:

Encourage energy efficiency measures to reduce fuel consumption and minimize the dependence on imported fuels. Promote investments in domestic refining capacity to enhance local production and reduce the reliance on imports, thereby reducing the impact of fluctuating global oil prices on fuel prices.

8. Monitor and evaluate the impact:

Establish a robust monitoring and evaluation system to assess the impact of removing fuel subsidies. Monitor fuel prices, inflation rates, economic indicators, and social outcomes to identify any potential negative effects and make necessary adjustments to policies as required.

In conclusion, government’s strategic approach should focus on ensuring a just and equitable transition, while simultaneously working towards a more sustainable, efficient, and diversified energy sector. While this is possible anywhere in the world, it may look impossible in Nigeria because of the kind of people who constitute the cartel in the oil industry. I believe it is possible when we have a leader who is 60% sane, and 40% insane to lead Nigeria. There are situations when that leader who will transform Nigeria will transit to that level where he becomes 60% insane and 40% sane to effect and enforce policies and frameworks that will transform the country at large. Until that leader comes, it will be difficult to move Nigeria forward.

This is SDK with the Value-based No Excuse Leadership Perspective.