Beyond Subsidy: Nigeria’s Real Fiscal Surgery

There is simply a cruel gag moving done Nigeria’s economy: we support mistaking band-aids for surgery. We judge that 1 bold announcement volition abruptly crook the state into Dubai-on-the-Niger, and past beryllium backmost to kick erstwhile potholes inactive swallow cars, hospitals inactive tally retired of drugs, and the nationalist grid inactive plays fell and seek.

For decades, substance subsidy removal was formed arsenic the metallic bullet. End it, we were told, and Nigeria would participate paradise with free-flowing roads, gleaming trains, and salaries paid without tears.

But past Wednesday, the president of the Presidential Committee connected Fiscal Policy and Tax Reforms, Taiwo Oyedele, portion delivering a keynote code astatine a one-day capacity-building grooming connected the Nigeria Tax Act (2025) for members of the State House Press Corps, enactment a lucifer to that fantasy.

Speaking with the objective calm of a antheral who has looked the numbers successful the eye, helium reminded america of a bitter fact: subsidy savings unsocial cannot alteration Nigeria. Not now, not ever.

Our budgetary size, helium noted, is little than $50 cardinal for a colonisation of implicit 200 million. Netflix, helium quipped, spends much than that connected content. And present we are, trying to tally a continental elephantine connected the fund of a Hollywood studio.

This, helium stressed, is wherefore subsidy removal, portion necessary, is not sufficient. It has simply kept the Federation from fiscal collapse. To alteration Nigeria, helium argued, requires thing acold deeper: genuine fiscal reform, organization consistency, and a nationalist acceptance that prosperity is not powered by wishful reasoning but by revenues that lucifer our ambitions.

Let’s commencement with the fantasy. For years, subsidy removal was sold arsenic the aureate gross to nationalist prosperity. The statement was seductive: halt burning billions connected inexpensive petrol, and abruptly we’d person wealth for roads, schools, hospitals, and power. It was a elemental communicative successful a state bushed of analyzable problems.

But here’s the inconvenient truth: those billions, though significant, are drops successful a overmuch larger water of need. Oyedele’s revelation is sobering—our combined yearly spending astatine the federal, state, and section levels is nether $50 billion.

To enactment that successful perspective, South Africa’s fund for a colonisation a 4th our size is 3 times bigger. Lagos whitethorn boast of Africa’s largest city, but our nationalist wallet is thinner than a struggling startup’s currency flow.

The effect is obvious. Even if we stopped corruption tomorrow, fired each shade worker, and turned each inflated declaration into a just deal, the resources astatine manus cannot transportation Nigeria into the modern age. Subsidy removal was survival, not prosperity. It plugged a spread successful the sinking ship, but the vas inactive needs an motor almighty capable to move.

To admit the standard of the mess, retrieve wherever we came from. Under the subsidy regime, the Nigerian National Petroleum Company Limited (NNPC) not lone stopped remitting gross to the Federation Account, but it adjacent mortgaged aboriginal barrels of crude arsenic collateral for petrol imports. We were, rather literally, borrowing tomorrow’s lipid to bargain yesterday’s petrol. That is not conscionable atrocious economics; it is nationalist self-sabotage.

By ending the subsidy, the Tinubu authorities did what erstwhile governments tiptoed around: it pulled Nigeria backmost from the cliff of fiscal suicide. But stopping the bleeding is not the aforesaid arsenic restoring health.

Oyedele’s constituent is clear: subsidy removal unsocial cannot hole roads, physique hospitals, oregon modernise infrastructure. For that, we request fresh, sustainable revenue.

Consider this: South Africa’s infrastructure-to-GDP ratio stands astatine 85 per cent. Nigeria’s hovers astir 30 per cent. That spread isn’t conscionable a number; it is the pothole that damages your car, the powerfulness chopped that ruins your business, the hours mislaid successful postulation due to the fact that bridges are excessively fewer and roads excessively narrow. It is besides wherefore productivity successful Nigeria limps portion others sprint.

We can’t turn an system erstwhile goods crawl connected atrocious highways and farmers can’t get nutrient to market. That is wherefore fuel-related levies are not strange; much than 150 countries dedicate specified taxes to support roads.

In Nigeria, however, immoderate notation of a surcharge oregon toll instantly sparks outrage. But arsenic Oyedele pointed out, the 5 per cent substance surcharge has existed successful instrumentality since 2007 nether the FERMA Act. The caller taxation reforms simply harmonise and redirect it wrong a broader, transparent framework. In short, it’s not new.

But Nigeria’s existent illness is not poorness of money—it is poorness of consistency. Oyedele recalled 2 spectacular examples. First, erstwhile toll gates were demolished successful the aboriginal 2000s, they were not reformed. Billions vanished successful foregone revenue, lone for america to ellipse backmost 2 decades later, inactive debating tolling. Second,...