Demanding Accountability: Why Subsidy Savings Must Reach Ordinary Nigerians

- A TREATISE 

 By Ben AHANONU 

The fuel subsidy removal in Nigeria was heavily promoted as a necessary economic turning point by many concerned citizens and international financial institutions, but for the average person living in the country, the promised relief remains painfully out of sight. While the macroeconomic arguments for ending the subsidy were clear—chiefly freeing up vital capital for national development—the immediate reality on the ground is marked by severe hardship, soaring food inflation, and a growing sense of frustration among the population. President Bola Tinubu deserves recognition for taking the bold and politically challenging step to eliminate this financial drain on day one of his administration, yet the subsequent pain inflicted on everyday Nigerians means that commendations must be paired with an urgent call for more decisive, structural action. Without these deeper interventions, the initial policy shift risks becoming a catastrophic exercise in economic futility.

A primary source of the public's disillusionment lies in how the saved revenues are being managed and distributed across the tiers of government. Following the subsidy removal, increased monthly allocations from the Federation Account Allocation Committee have been handed over to state governors, resulting in an unprecedented influx of cash. Despite this, citizens are not feeling the positive impact of these funds because, in many states, there is a total lack of accountability, and governors frequently treat these resources with a degree of personal discretion that does not align with the urgent needs of their people. For the policy to truly succeed, this windfall cannot simply fund sub-national government operations, luxurious lifestyles, or politically motivated white-elephant projects that hold no value for the poor. It must tangibly improve public infrastructure, healthcare, and education at the grassroots level. A strict oversight framework must be established to monitor how states utilise their post-subsidy allocations, incorporating independent auditing bodies and civil society trackers so that when local governance fails to deliver visible results, the macroeconomic benefits of subsidy removal are not completely lost to the average citizen.

Furthermore, asking citizens to endure economic austerity is unsustainable while the cost of governance remains astronomically high and official corruption continues unabated. Everyday Nigerians cannot be expected to tighten their belts while public officials expand their motorcades, purchase luxury vehicles, and allocate massive budgets to non-essential state expenses; this stark contrast breeds deep public mistrust and undermines the legitimacy of any economic reform. To build trust and foster national solidarity, the federal and state governments must match the public's sacrifices by drastically reducing their own overhead spending, rationalising bloated government agencies through the full implementation of the Oronsaye Report, and aggressively tackling pervading corruption.

True economic reform is not a one-way street, but a multi-pronged approach where leadership by example forms the foundation of public policy. To avert total economic collapse and transform current hardships into shared prosperity, the government must aggressively implement interventions across four critical pillars, beginning with the institutionalisation of permanent social safety nets. The era of distributing ad hoc, temporary palliatives—such as bags of rice or token cash transfers—must come to an end because these methods are highly prone to corruption, lack sustainability, and fail to lift families out of structural poverty. Instead, Nigeria needs institutionalised, well-targeted welfare systems for the poor, vulnerable, and unemployed. This requires building a verifiable, biometrically authenticated National Social Register to eliminate ghost beneficiaries and move toward a sustainable social security infrastructure that ensures relief reaches those who actually need it. This system should cushion the blow of inflation effectively through structured unemployment benefits, health insurance subsidies, and child welfare programmes that protect vulnerable households.

Alongside robust social safety nets, full downstream deregulation must be genuinely achieved, which means completely breaking up monopolies and monopsonies in the petroleum sector. While the emergence of local refining capacity is a positive step toward national self-sufficiency, the downstream market must be fully liberalised to prevent the rise of private monopolies. Sector regulators must ensure a level playing field by allowing more independent Nigerian operators to import, distribute, and compete freely without bureaucratic bottlenecks. Healthy competition is the most reliable mechanism to drive operational efficiency, improve service delivery, and ultimately lower prices for consumers through natural market forces rather than state decree.

Simultaneously, the government must execute aggressive agricultural and supply chain interventions, as skyrocketing food inflation is the most immediate threat to household stability across Nigeria. The government must directly address this crisis by securing farming regions from banditry and conflict, which have driven thousands of farmers away from their ancestral lands. Apart from security, targeted investments are needed to improve rural logistics, including fixing rural feeder roads, reducing heavy transit levies, and lowering the costs of transporting goods from farm to market by incentivising compressed natural gas (CNG)-converted trucks. Food security must be treated as a matter of urgent national security, supported by modern storage facilities to reduce post-harvest losses.

Equally, long-term economic stability requires deliberate demographic planning, because economic growth can easily be outpaced by unmanaged population expansion. Nigeria must initiate honest, culturally sensitive dialogues around population growth, which is often accelerated by traditional or religious teachings, ensuring that future economic growth is not entirely swallowed by rapid demographic expansion.

To expand deeply on these challenges, we must look at the specific mechanisms through which the post-subsidy revenues are being diluted. When the federal government dissolved the subsidy regime, the immediate result was a massive increase in the cash pool shared at the monthly meetings of the Federation Account Allocation Committee. This money belongs to the entire federation, yet the institutional plumbing of Nigeria allows state governors to receive these funds with minimal federal strings attached. In a truly functional federal system, an increase in state revenue should correspond directly to an increase in local infrastructure, better-equipped primary healthcare centres, and well-funded public schools. Instead, the reality across many of Nigeria’s thirty-six states is a bleak continuation of fiscal irresponsibility, where the extra billions are swallowed up by bloated administrative costs, political patronage, and security votes that are never publicly accounted for. To fix this structural defect, the federal government must partner with civil society organisations to create an open-access portal that tracks every single naira released from the post-subsidy savings down to the specific local government area where it is spent. If a state receives an extra five billion naira in a given month, citizens must be able to log online and see exactly which roads are being paved, which hospitals are receiving medical supplies, and which schools are being renovated with that specific money. Without this level of radical transparency, the removal of the subsidy simply amounts to taking wealth away from the masses and handing it over to a small political elite at the subnational level.

At the same time, the moral crisis of Nigerian governance cannot be overlooked if the state expects the population to remain peaceful under the weight of these reforms. For decades, the social contract in Nigeria has been deeply fractured, and the sudden spikes in the cost of transportation, electricity, and basic consumer goods have strained this contract to its absolute breaking point. It is a psychological and economic injustice to demand that an ordinary citizen, who survives on a meager minimum wage, should accept the reality of hyperinflation while public officials live in a completely different economic reality. The continuous purchase of bulletproof sports utility vehicles, the multi-billion naira renovations of official residences, and the funding of massive international delegations for routine governmental tasks send a dangerous signal to the public. It tells the population that the economic crisis is a burden meant only for the poor to bear, which destroys national solidarity and fuels civil unrest. Therefore, leadership by example is not a cosmetic luxury; it is an absolute policy requirement. The federal government must lead an aggressive campaign to downsize the cost of running the state, which includes eliminating redundant agencies, cutting down the number of political appointees, capping the maximum size of official convoys to three vehicles, and freezing the purchase of non-essential luxury items across all arms of government.

The transition from temporary palliatives to a permanent social safety net also requires a complete overhaul of the way the Nigerian state views welfare. For too long, governance has been reduced to transactional politics, where politicians distribute small bags of grain or minor cash handouts during crises or election seasons, creating an environment of dependency and opportunities for systemic diversion. A modern economy cannot survive on handouts; it requires institutional structures that guarantee a basic standard of living for its most vulnerable members. By building a comprehensive National Social Register anchored on biometric verification, the government can completely bypass corrupt middlemen and transfer financial support directly to verified citizens. This safety net must be designed to protect people at every stage of life, offering structured unemployment insurance to young graduates, health insurance subsidies to low-income families so that a medical emergency does not lead to financial ruin, and targeted nutritional support for children to combat the rising rates of malnutrition in rural communities.

In the energy sector, the ultimate goal of deregulation must be the creation of an open, competitive marketplace that benefits the consumer. The launch of local refining assets was heralded as the ultimate solution to Nigeria's fuel crises, but local production alone cannot fix a broken distribution system if the market remains vulnerable to monopolistic practices. True deregulation means that the government must completely step back from price-fixing and focus its energy entirely on regulation, ensuring that multiple independent operators can import, refine, store, and distribute petroleum products without facing artificial barriers or political favoritism. When multiple companies are forced to compete for the patronage of the Nigerian consumer, they will naturally be driven to optimize their supply chains, reduce operational waste, and offer the lowest possible prices to maintain their market share. This competitive dynamic is the only sustainable way to stabilize fuel prices in the long run, removing the burden of energy costs from the government's balance sheet while protecting the purchasing power of the public.

Furthermore, the fight against food inflation must be elevated to the highest level of national priority, as no nation can achieve economic stability when its population is hungry. The security crisis in Nigeria's agricultural belt must be met with an overwhelming and sustained security response, deploying specialized agricultural security forces to protect farming communities and guarantee that farmers can plant and harvest their crops without fear of violence. Beyond security, the physical movement of food from rural farms to urban markets must be revolutionised, which requires a massive capital investment in fixing rural feeder roads that are currently impassable during the rainy season, leading to the spoilage of perishable goods before they ever reach consumers. Additionally, the government must actively incentivise the logistics sector to transition away from expensive diesel fuel by providing tax breaks and financing options for transport companies that convert their haulage trucks to Compressed Natural Gas, which is a cleaner and vastly cheaper domestic energy source that can instantly slash the cost of transporting food across long distances.

Finally, the long-term survival of the Nigerian economy depends on the country's ability to manage its demographic growth in a way that matches its economic capacity. A large and youthful population can be an incredible engine for economic growth, but only if that population is highly educated, healthy, and provided with concrete economic opportunities. If the population continues to expand rapidly without a corresponding expansion in industries, schools, and infrastructure, the country will face an unmanageable youth unemployment crisis that will continuously feed into insecurity and poverty. The government must engage in a respectful, long-term dialogue with religious leaders, traditional rulers, and community stakeholders to promote family planning, girl-child education, and reproductive health tracking, shifting the cultural focus away from sheer numbers and toward the quality of human capital development. The removal of the fuel subsidy was a painful but necessary step away from a broken economic model, but it is only the foundation upon which a new, productive economy must be built. The ultimate success of this administration will not be judged by the macroeconomic numbers reported by international banks, but by the tangible improvement in the daily lives of everyday Nigerians, making it imperative for leaders at all levels to act with urgency, transparency, and compassion to ensure the sacrifices made today lead to a stable and prosperous country.

God bless the Federal Republic of Nigeria.

Prince Ben AHANONU,

Principal Partner,

Ben AHANONU and Associates.

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