THE face-off between the Federal Government and labour unions in the country is not uncommon. One of the notable instances occurred in January 2012 when then-President Dr. Goodluck Jonathan announced the removal of subsidy. Labour unions, under the aegis of the Nigerian Labour Congress (NLC) since its establishment in 1978, have declared several industrial strikes to press certain demands. The current face-off stems from the removal of subsidy on fuel importation by the Federal Government. Previous administrations before President Bola Ahmed Tinubu paid subsidy on fuel. The Nigerian National Petroleum Corporation claimed that Nigeria spent N400 billion monthly to subsidise fuel prices.
HOWEVER, there are allegations that subsidy payments have been a means to enrich the pockets of a few influential individuals in the country. Prior to the 2023 presidential election, all major contestants pledged to stop subsidy payments, and President Tinubu did just that immediately after being sworn in on May 29, 2023. Economists, political analysts, and international organisations who had long advocated for an end to fuel subsidy, commended Tinubu for taking the bold step to end the corrupt practice.
NEVERTHELESS, the removal of subsidy on fuel importation has led to a significant increase in petroleum product prices, resulting in high inflation and an increase in the prices of commodities, goods, and services. Many Nigerians have been pushed below the poverty line. The government’s palliative measures, such as the N8, 000 monthly stipend to poor Nigerians, faced intense criticism. Some states also implemented measures like reducing working days for civil servants. However, these were insufficient to mitigate the effects of the subsidy removal.
IN response to lack of adequate measures to ameliorate the negative effects of subsidy removal on Nigerians, the Nigerian Labour Congress and the Trade Union Congress embarked on a 2-day nationwide warning strike on September 5 and 6, giving the government two weeks to respond to their demands. The labour unions demanded a 300% salary increase and an increase in the minimum wage to N200, 000 to help workers cope with the challenges resulting from the deteriorating economic situation due to the removal of the controversial fuel subsidy.
IN his Independence Day address, President Tinubu said salaries of low grade Federal civil servant would be increased by N25,000 for a six month period but this was, at another crucial meeting, increased to N35,000 to all federal workers. Additionally, N75, 000 was allocated to 15 million poor Nigerians for three months. He also highlighted initiatives such as the Infrastructure Support Fund for states, reducing transport costs through Compressed Natural Gas buses, implementing direct fiscal and monetary policies to combat inflation, supporting the poor and vulnerable, and funding enterprises with great potential. Labour unions advocated for a higher wage, and the presidential team promised to present their demands to the president. Temporarily, the planned nationwide strike on October 3 was suspended by labour unions for a month.
HOWEVER, it is “Not Yet Uhuru. Past agreements between the government and labour have sometimes led to unfavourable outcomes. In the short term, the government should implement measures that significantly mitigate the effects of subsidy removal on Nigerians to prevent a nationwide strike.
MANY previous palliatives did not reach the intended beneficiaries. The government should ensure that the monthly stipends and other palliative measures reach average Nigerians, regardless of their locations. Equitable distribution of the palliatives requires accurate data, which the country currently lacks. This raises concern. The outcomes of Coronavirus palliatives distribution are still fresh in our memories
IN light of food insecurity and economic frustrations, the government should enhance food production by providing seedlings and necessary inputs to farmers. Labour should also exercise caution, as crippling a struggling economy will not benefit anyone, including the workers the NLC claims to be fighting for. Shutting down the nation will exacerbate the already tense security situation and collapsing economy in the country.
IN the long run, monetary and commodity palliatives are temporary solutions. It is shameful that the third-largest oil producer in Africa lacks a single functional oil refinery while several oil-less countries have operational ones. Fixing the refineries will diminish the significance of fuel importation, scarcity, and subsidies in the country.
ADDITIONALLY, diversifying the economy is imperative. Agriculture used to be Nigeria’s economic mainstay but was abandoned after the discovery of oil. Investments in agriculture, small and medium-scale enterprises, and other critical sectors will bolster the nation’s economy and revenue.