Solution To Prevailing Economic Hardship In Nigeria

...The Governor Alex Otti's Methodology 



There is no doubt that Nigeria a country of over two hundred million people is currently going through myriads of problems inclusive but not limited to insecurity, electricity crisis, hunger, apprehension, state of hopelessness, fear, infrastructural deficit, inflation ,among other economic challenges.

Worsened by the removal of fuel subsidy as announced by President Bola Ahmed Tinubu in his inaugural speech on monday 29th may 2023.

However, Fuel subsidy removal means that the government has stopped providing financial support to reduce the cost of fuel for consumers,
The purpose according to stakeholders is usually to reduce government spending and promote more efficient use of resources.

That particular announcement gave Nigerians a big shock leading to many Nigerians developing various health situation as it was least expected,this immediately led to the adjustment of pump price of fuel from #225 to #650 thereby skyrocketing prices of goods and services.

This situation,however, has since then worsened the living condition of an average Nigerian, especially civil servants whose monthly salaries have been static for many years.

It has equally swept many household off their feet as a family of 5 could barely afford 3 square meals,how much more fueling their vehicles and Generating sets to complement the epileptic power supply that has crippled many economic activities.

It is in view of these and more, that the Governor of Abia state ,Dr Alex Otti in an explosive and thought provoking lecture during the 63rd founder’s Day lecture of University of Nigeria Nsukka (UNN) held on Thursday 5th October 2023 at the Princess Alexandra Auditorium and Unity Hall,called for an immediate measure to cushion the harsh effect of the removal of fuel subsidy on Nigerians who are gnashing their teeth.

Some of the measures postulated by the Governor of Abia state include, upward review of the current salary structure being paid to civil servants across the country.

Governor Alex Otti noted that the issue of wages should also have been considered even though, it is not yet late. He noted that the national minimum wage must reflect current economic realities otherwise,the current national minimum wage tantamounts to starvation wage and would invariably lead to frustration and public anger.

A first class economist and celebral administrator whose lecture was entitled; “Petroleum Subsidy removal;Dealing with the challenges, harnessing the opportunities”, The Governor noted that the removal of fuel subsidy was clearly the right decision but that responsive measures could have been put in place to insulate the public from the anticipated shocks that would obviously follow the decision”

He was also of the opinion that “while the urban poor would have benefitted extensively from a subsidized mass transit system,the rural poor would be more satisfied with cash transfers,food palliatives,farm inputs and low interest agro -loan targeted specifically at small holder farmers”.

The call for upward review of wages, financial intervention and other welfare packages by Governor Alex Otti is not farfetched as the National Human Rights Commission (NHRC) recently acknowledged that many more people have fallen into the poverty trap since the removal of fuel subsidy while the World Bank estimates that 7.1 million more people could be pushed into the poverty net in a matter of months.

Other recommendations by Governor Alex Otti is the immediate development and implementation of robust policy measures to address the multiple challenges of rising poverty and unemployment.

The Governor called on all levels of government to immediately invest on mass transit schemes,strictly as a social service and must be managed by people with a good understanding of transportation within and across cities and must not be used as a political compensation programme.

He recommended that LGAS, States and the federal governments must channel a part of their receipt from subsidy savings in support MSmEs which are critical engines of economic growth.

Dr Alex Otti was also of the view that the best way to harness the energy and creativity of the young Nigerians is to expand the enterprise space,take off the many restrictions that have been known to frustrate businesses such as multiple taxation and harasment by thugs.

More worrisome is the fact that higher fuel cost and unstable electricity supply from power distribution companies have forced many small and medium scale enterprises out of business further complicating the worrisome unemployment situation in Nigeria.

Government should however, note that the success of fuel subsidy removal depends on effective communication, transparent policies, and the implementation of measures to support vulnerable groups during the transition by the government.

It is a known fact,that removal of fuel subsidy has negative implications that include decrease economic growth in kithe short term, increase inflation, increase in poverty, increase in fuel smuggling, increase in crime, increase in the prices of petroleum products and loss of jobs in the informal sector.

To this end,It is recommended, hiwever, that the government should carefully evaluate the impact of fuel subsidy removal on individuals and businesses and provide palliatives and other economic relief programs to cushion the adverse effect on individuals and firms.

The federal,State and Local governments should know that if these recommendations are immediately and carefully implemented ,it will to an extent save lives,rescue remaining businesses from total collapse as well as give the citizens hope of survival.

There is no other better time for these life saving interventions than now.

Ezechukwu Adimoha