Subsidy Removal Was Painful — But Reversing It Is Not The Answer
The argument over what Nigeria should do next
I do not agree with former Vice President Atiku Abubakar that Nigeria should return to the petrol subsidy regime. I also do not believe that accepting the removal of the subsidy means pretending that the manner in which it was implemented was satisfactory. Those are two separate questions, and, in my view, Nigeria must be honest enough to examine both.
Atiku has now made restoration of the subsidy part of his economic proposition for 2027. On 25 August 2026, he reiterated that he would restore the subsidy if elected, arguing that Nigerians should not be abandoned to hardship. The Federal Government, however, has rejected that position and continues to defend the reform.
My position is different. I believe the subsidy should remain abolished, but the government must be far more transparent about what Nigerians have gained from its removal and how the resources released by the policy are being used.
I have a personal history with this argument
For me, the issue is not merely academic.
In 2012, I joined protests in Washington, DC, against the then administration of Goodluck Jonathan over its attempt to remove the petrol subsidy. I did so because I believed arguments being made at the time by people I considered political allies, including Bola Tinubu and other self-described progressives, that the subsidy represented a serious economic distortion.
Years later, hearing former Ekiti State Governor Kayode Fayemi describe the political calculations surrounding the opposition to Jonathan’s subsidy policy left me deeply disappointed. I had believed that the opposition was fundamentally about economic principle. Discovering that political strategy had also been involved made me question my own judgment.
That experience shapes my position today.
I am therefore reluctant to accept the argument that restoring the subsidy would automatically represent a more compassionate economic policy. Nigeria has lived with the subsidy system for decades, and its problems were not invented in 2023.
Removal was necessary; implementation was another matter
Peter Obi’s position is closer to mine on this point. In 2023, shortly after President Tinubu announced the removal, Obi argued that subsidy should ultimately go but criticised the manner of implementation and said relief measures should accompany the policy.
That distinction is crucial.
The World Bank had previously warned that Nigeria’s petrol subsidy was fiscally expensive and encouraged inefficient fuel consumption, smuggling and other distortions. Its analysis estimated that the subsidy had cost about 2.2 per cent of GDP in 2022. It also warned, however, that removing the subsidy without adequate protection for vulnerable households could push more Nigerians into poverty.
So I cannot honestly argue that everything about the old system was sustainable. But neither can I dismiss the suffering created by its removal.
The problem was the transition.
Petrol prices rose sharply after the policy change, feeding into transport, food, production and household costs. The World Bank subsequently stressed the need for stronger social protection and measures to cushion the loss of purchasing power.
The real question is where the savings go
This is where my argument becomes more complicated.
If the subsidy has been removed, Nigerians deserve to know precisely what has happened to the resources that were previously committed to it.
The Federal Government said in August 2026 that subsidy removal generated ₦15.8 trillion in resources for the Federation between June 2023 and December 2025. It also clarified that this was not money sitting in a separate account labelled “subsidy savings”, but resources that became available because government stopped funding the subsidy.
That explanation is important, but it also makes transparency more important.
The IMF has offered a different caution. In its 2026 Article IV assessment, it said estimated savings from the subsidy reform did not appear to have accrued to the budget in 2025 as expected, while noting that increased debt servicing and other fiscal pressures complicated the picture.
For me, that is the heart of the controversy.
Nigerians need structural relief, not just cheaper petrol
I recognise that many Nigerians remember subsidised petrol as one of the few tangible economic benefits of living in an oil-producing country. But cheap petrol alone cannot build functioning schools, hospitals, roads, public transportation or reliable electricity.
What Nigeria needs is a deliberate programme for converting fiscal savings into visible improvements in everyday life.
That means better public transportation, lower energy costs, improved electricity supply, stronger social protection, productive employment and investment in infrastructure. It also means ensuring that public institutions become capable of delivering services efficiently.
If the subsidy is gone but Nigerians see no corresponding improvement in public services, then the policy will continue to appear to citizens as nothing more than an additional burden.
I would keep the reform — but change what follows it
I therefore disagree with calls to simply return to the old subsidy arrangement.
At the same time, I reject the idea that Nigerians should be told to endure hardship indefinitely because the reform has already happened.
The removal should remain, but its proceeds must be subjected to far greater public scrutiny. Government should publish clear, comprehensible accounts of the resources released, explain where they have gone and demonstrate what Nigerians are receiving in return.
The choice should not be between an expensive subsidy regime and unrestricted hardship.
The real choice should be between wasteful public spending and productive public investment.
That, in my view, is where the debate ought to move.
