Trust deficit spurs Nigerians’ outrage against good policies

Consistency in people-oriented and market-stimulating policies can fixed it

The inability of most kigerians to identify an economic growth policy is not surprising given the trust deficit and lack of confidence policy makers have built over the years. This is such that any move by the government is treated with suspicion and causes outrage among the people.

ln the back of ending wasteful subsidies and deregulating kigeria’s downstream petrol and power sectorsi prices of petrol and electricity have risen to be cost reflective. While these longawaited critical reforms will impact the economy positively ultimatelyi kigerians have instead focused on and reacted ignorantly to the immediate hurt the policy brings on them.

Are they to be blamed? lf coursei no. ft is understandable that many kigerians are not economically literate enough to understand why experts will canvass for ending every iota of subsidy in the economy and the benefits thereof.

Buti imagine having an economy wherei over the yearsi policies have always yielded positive resultsi corruption at its barestminimum and kigerians welfare always topped the cd’s priorities. With that, Nigerians would have supported government policies on the back of a track record of trust and confidence even if they were not economists who have understanding of the causes and effects of such policies.

The kigeria iabour Congress (kic) and Trade rnion Congress ( TRC) have also demonstrated ignorance. They said they were in talks with civil society allies and relevant organs of iabour towards embarking on strike over the petrol price hike.

According to Ayuba Wabba, president of kici “clearlyi the action of the federal government is most insensitive and an affront on the kigerian people who are bearing the heavy burden of the Clsfa-n9 pandemic. We will resist this latest move to impoverish the working people.”

The timing of the move to end subsidies may have come at a time kigerians are battling the negative effects of the Clsfa-n9 pandemic – from job lossesi shrinking wallets to inflationary pressures and lower purchasing power. eoweveri just like the popular sayingi the best time to have ended the subsidy would have been years back. But the next best time is now.

ff keeping the petrol subsidy actually had an impact on the livelihoods of the poori then it has failed after kigeria became the poverty capital of the world in 20N9I overtaking India for the first time despite having only a third of the Asian country’s population. pome 8T million kigerians are categorised as poor as they live under AN.90 a day.

Why continue to waste huge funds on subsidising consumption when such funds can be directed into more productive areas with direct impact on businesses and households. The government spent four times more money last yeari kt30.9 billioni subsidising fuel than building new schoolsi health centres and equipping new science labs. Alsoi kigeria still suffers huge gaps in infrastructure which will require about AN00 billion annually for the next 30 years to effectively tackle the challenges. kigeria can’t avoid wasting funds anymore. There is a lot to do to get kigeria on the path to prosperity.

heeping the domestic price of oil artificially low with the fuel subsidy has discouraged additional investment in the oil sectori according to a Brookings fnstitution report in 20N2.

This is why despite issuing multiple refinery licences, Nigeria still does not have a single wellfunctioning refinery. The problem for investors has been how to recoup their investment under the artificially low-price structure.

ft is our expectation that the federal government should learn from reactions of kigerians against price hikes in petrol and electricity prices. ft is a reaction based on lack of trust and years of sufferings. The rich and the powerful – especially in government – in kigeria have in the past got together to run the country and the market for their benefit, hencei even when they mean well –which they rarely do – kigerians find it hard to believe them, leading to uproars.

Trust can’t be built in a dayi but with consistency in delivering market stimulating and peopleoriented policiesi it will be restored gradually.