Abia state Governor, Dr. Alex Otti, Thursday, shared insights on the contentious issue of fuel subsidy removal by the Federal Government, acknowledging the decision as a step in the right direction.
Governor Otti who was a guest Lecturer at the 63rd Founders Day of the University of Nigeria Nsukka (UNN) made his feelings known in a thought-provoking lecture titled “Fuel Subsidy Removal: Dealing with the Challenges, Harnessing the Opportunities”, expressed belief that the decision to eliminate fuel subsidy was long overdue, and should have been implemented years ago.
The Governor, however, highlighted the critical importance of effective policy communication, particularly when introducing reforms that may disrupt established systems and emphasized that transparent and timely communication could have mitigated some of the concerns and resistance raised by citizens concerning the fuel subsidy removal.
He said that the federal government had not done enough to educate the public about the issues at stake and the economic risks associated with continuing the subsidy.
He noted, “One thing I have learnt in communicating policies and plans is that you can never get everyone to agree with your proposals. However, sincere and clear communication using various channels would help on two fronts: buy you genuine public support and give your audience an opportunity to understand your intentions better.”
“The removal of fuel subsidy was clearly the right decision and should have been done about ten years ago or earlier but even then, I am of the considered opinion that more could have been done to insulate the public from the anticipated shocks.
“Being a policy that would introduce shock into the system, I believe it should have been communicated better. I do not think that much was done to properly educate the public on the issues at stake and the danger continued payment of subsidy posed to the economic health of the country“.
Governor Otti also spoke on the misconception that fuel subsidies were primarily government handouts to the poor and highlighted that evidence suggested the poor did not benefit as previously believed.
He said that Nigeria’s universal price subsidy for petrol disproportionately benefits the wealthy, unlike in other developing countries where subsidies often target essential goods consumed by the poor.
Otti emphasized the adverse impact of subsidy-driven imports on domestic refining investments, as profit-seeking investors struggle to compete with subsidized fuel prices and noted that the lack of investment in local refining has had severe economic consequences, including job losses and hampering the growth of related industries.
He cited examples from other nations, like Angola and Senegal, where governments strategically retained subsidies on essential products for the poor while reducing others and encouraged a similar approach in Nigeria.
The Governor called for the development of a more comprehensive policy framework to support specific areas of need identified by the World Bank and suggested that measures such as subsidized mass transit, cash transfers, food assistance, and low-interest agricultural loans should have been considered to support the urban and rural poor.
Governor Otti advocated for a reconsideration of the national minimum wage to reflect the current economic realities, emphasizing the importance of prioritizing the welfare of the population.
He expressed concerns that the removal of fuel subsidy had exacerbated living conditions for citizens and urged the immediate implementation of robust policies to address rising poverty and unemployment.
Governor Otti who shared several initiatives undertaken by the Abia State government to mitigate the effects of fuel subsidy removal, such as tax holidays for micro, small, and medium enterprises, free medical services, disclosed plans by his administration to mitigate the effects of fuel subsidy removal on Abia civil servants.
“We are presently working on a template to pay transport-support allowance to civil servants starting from this month. Our plan is to raise current salaries by a certain percentage depending on grade levels. The aim is to cushion the harsh impact of the rising inflationary trend on their earnings and support them to provide the basic things for their families“, Otti said.
In his address, the Vice Chancellor of the Institution, Prof Charles Arizechukwu Igwe said that the Founder’s Day celebration of the UNN is an annual event to commemorate the birth of the first Indigenous University in Oct 1960 by Dr Nnamdi Azikiwe.
Prof Igwe noted that Governor Otti was chosen to deliver the 63rd lecture based on his uncommon achievements which would serve to inspire and motivate the staff, students and alumni of the Institution.
He said the lecture titled, Petroleum Subsidy Removal; Dealing with the challenges, harnessing the opportunities”, is intended to create a state for serious reflections and discussions on issues of national and global interest.
The event which was chaired by Professor Elochukwu Amaucheazi was attended by the Governor of Enugu State Chief Peter Mbah represented by the Information Commissioner Enugu Mr Aka Eze Aka, the Vice Chancellor ABSU Professor Maxwel Ogbulu, members of the Abia state Executive Council, the Academia, Abia Indigenes in Enugu among others.
