BEYOND THE FUEL SUBSIDY REMOVAL IN NIGERIA

In analyzing and discussing the rightness or otherwise of the decision to remove this fuel subsidy, it is essential to consider its relative impact and broader implications before we take sides or take a stand. I am aware of the different perspectives already brought to the table, especially regarding the real pains Nigerians would suffer today given his subsidy removal. What I am yet to hear is the discussion on the long-term implications of the happenings around the gradual shift from the consumption of fossil fuel in order to protect the climate and how this subsidy element should be handled in the light of global action to stem energy costs relative to the income individuals and businesses make.
I promise not to bother you with the issue of climate change, as evidently, not many people care about that in this clime when many struggle to feed. But I am certain that we should care about the continued future sustenance of public salaries, the maintenance of the educational system, the regular payment of pensions, the availability of affordable medical facilities and other professionals, and other very important infrastructure in the future. These issues should make us pause and reflect on the wider economic impact of Oil on our economy and possible scenarios of the impact of today’s decision.
There is bad news and good news. It’s good news if you see the broader perspective and the advantage to all humanity, but bad news if you see this from the Nigerian short-term perspective. Down from all ages, man has infused much labour into finding access to energy, He once hunted whales to get whale oil to light nights and then moved to ravaged mountainsides for coal. Yet not-assuaged, we drilled kilometres under the ground and under the ocean floor to search for oil. And now he is seeing energy in the sun and wind. You may ask, What are men looking for?
In 1750 BC (you would need 50 hours of work to afford a one-hour light from Sesame Oil Lamp cost and in the 1800’s one hour of light would cost an average person a little more than six hours of work. The search and dip in price continued till1800’s when we began using kerosene lamps at the cost of 15 minutes of work. Oh la la! TODAY, if you put up your light bulb for one hour of light you would be paying less than 0.5 seconds of work… (I got these figures from Singularity University and Goofe)
Here is the thing. There is no sedentary treasure in energy that man may find that would assuage him until the nominal hourly income of every person significantly outpaces the nominal price of the resource required to generate it. or come to zero. And as a consequence of the relentless push, global poverty, and inequality continue to reduce significantly over the centuries. This has no doubt, directly benefitted Nigerians in the past, and present and would in the future
So for civil society leaders and opinion leaders of all kinds, while debates and anger over fuel price increases persist, it is crucial to look at the bigger picture, specifically the future demand for oil and its effects on the Nigerian economy. Are we considering the global energy trajectory and the potential long-term consequences of our actions? The world will continue driving down energy costs relative to income, given its impact on other costs and the quality of living. To illustrate this, the historical cost of light per hour about average wages demonstrates a remarkable decrease, emphasizing the trend toward more affordable energy.
Considering the world’s accelerating push towards cleaner energy and recent geopolitical developments, any reasonable person or leader should be concerned about our reliance on fossil fuels and the continuous investment in them. It becomes essential to explore opportunities within this challenge and seek intelligent sacrifices that can lead to positive outcomes. One such is what we do with the savings from the fuel subsidy. Many countries have set fixed dates for transitioning their public utilities from carbon-driven machinery to cleaner energy sources, with trials even underway for solar-powered aircraft. Saudi Arabia, traditionally reliant on oil, is diversifying its economy in anticipation of decreasing fossil fuel demand.

Rather than getting caught up in debates over short-term savings and subsidy corruption, the focus should shift towards investing in expanding access to alternative energy sources from the savings in subsidies we might be making today. Governments and business leaders must demonstrate sincerity by committing capital to stimulate innovation and develop disruptive solutions. These efforts can reduce dependency on fossil fuels, decrease expenditure on their consumption, and open up new industries and employment opportunities.
Our tendency to prioritize immediate needs has hindered our ability to imagine and prepare for the future, ultimately jeopardizing our chances of prosperity. We must acknowledge that tomorrow will inevitably arrive, and our responsibility is to proactively prepare for it. This entails rolling out innovation grants and prizes to incentivize and reward young inventors and entrepreneurs tackling the power problem. Simultaneously, it requires elevating the nation’s strategic role in the global energy landscape, reallocating resources to more strategic uses rather than squandering them on nonessential endeavours.

To navigate these challenges, a leader must exercise strategic agility. The absence of such leadership within civic society poses a greater danger than a mere increase in fuel prices. Now is the time to act decisively and provide direction. By accounting for the subsidy savings, directing this into and fostering innovation, empowering young talent, and reevaluating the nation’s role in the global energy arsenal, we can secure a sustainable and prosperous energy future.
Someone needs to step in. Great decisions and directions are not necessarily popular. And since the fuel subsidy was first implemented, so much has happened and changed. The cold war is ended, Russia invaded Ukraine, The twin tower was bombed, America invaded Iraq and Saddam Hussein and Gadaffy killed. Covid 19 has come and the global supply chain shot in. Nigerians now make calls on their mobile phones and can decide to call with free apps. Apple has released several editions and we now have ChatGBT. You can go to school from your phone or order a ride from your palm. So much has changed that makes it unreasonable to advance yesterday’s argument today without some reevaluation of our paradigm tactics and objectives.
And what happens if climate change is not a scary sexy word to confuse poor nations and we wake up to experience massive rising oceans, drought, famine, and colossal food and water shortage? Now is the time to demand a proactive plan and proof that something is being done. Perhaps, the debate should stretch beyond the removal of the subsidy to asking how is the removal helping to save the future, if we must make a sacrifice today.
It is high time we got more strategic and visionary

Segun Oke, an innovation driver and adviser, originally trained as a chartered accountant and attended several leading business schools. He has moved into nurturing and scaling startups and currently provides strategic direction for three startups creating abundance through the disruption of food distribution (SOUPE.ng), kindness crowdfunding (OGADONATE), and home ownership. (Oyabuild)