Friday, February 9, 2024

How Subsidy Removal Fuels Hunger In The Land

 By Adekunle Adekoya

Last week the video of a man seen crying in front of a market stall where he had gone to buy foodstuffs trended heavily on the internet, as it was widely shared across many platforms — chat groups on WhatsApp, on Facebook, and others. The man was seen in front of a shop where common foodstuffs like rice, beans, gari and others were on display for sale. After asking for the prices of the food items, he realised that he couldn’t afford to buy them with the money he had. He broke down, crying.

It is trite news that prices of everything, including and especially food items, have grown wings, taken off from the ground where they were before May 29, 2023, hit the roof, burst through into the skies, and are now headed for outer space. What is more worrisome is the rate at which prices increase. Sometimes it’s at three-day intervals, at other times, weekly, and most fearful of all, daily.

I mean, prices of certain items achieve an increase within 24 hours, with no logical explanation behind the increase. I am a bit familiar with the trade in eggs, a product of the poultry business. Last week, a crate of eggs left the farm in Ogun State for Lagos at a cost of N3,150. Transporters ferry a crate, being a fragile cargo, at a cost of N100 per crate from Ijebu-Ode to Lagos.

The recipient sells to retailers with a mark-up of another N100, bringing total cost to N3,350. This week, the same crate of eggs is leaving the Ijebu-Ode farm for Lagos at a cost of N3,300, while the transporter will carry it at the rate of N120 per crate. When the mark-up is added, a crate gets to the retailer at N3,520. For the business to be worthwhile for the retailer, one egg will likely be sold for N200.

Poultry farmers spoken to say the cost of rearing fowls has simply become prohibitive. One said that the cost of feeds for the birds is almost unaffordable, adding that what is realised from the sale of eggs is now not enough to pay for the feeds alone. Yet, there are other inputs, including wages for the farm hands employed to run the poultry. A farmer, in frustration, sold his stock of layers last Yuletide, and has opted not to buy fresh birds as it would cost him an arm and a leg to feed them till they get to the laying stage where the eggs they lay can be sold to realise money.


Further, he explained that manufacturers of poultry feed cite high cost of maize and other inputs, including running the factory on power from diesel generators, while the product is distributed using trucks that run on diesel. When these costs are factored in, it could be seen how the high cost of fuel energy (diesel @N850/900; and petrol@N568/650-700) is impacting the costs of what we eat. The same thing is applicable to cooking gas, which is delivered to retail points by diesel trucks.


What continues to befuddle my mind is still about the removal of subsidy. Throughout Buhari’s tenure, NNPC, the state oil monopoly, remained the sole importer of petroleum products. That situation has not changed. What was the subsidy removed for? To stop subsiding NNPC or the Federal Government? Who was subsiding who? Did we have subsidy removal or government simply jerked up the prices of petrol? Another very crucial question: Why has it been impossible for independent marketers to import? I suspected they would not be allowed to, when, at the onset of the new prices, it was announced that marketers wishing to import the products will have to be licensed. 


The serial, unrelenting rise in prices of all goods and services, especially food items, is causing grave concern nationwide, as evidenced by protests in Kano, Kogi and Niger states a few days ago. Government must act fast before this becomes a nationwide protest, at which point, the outcomes may be unpredictable. The APC spokesman, Felix Morka, worsened things by saying it was opposition parties that sponsored the protests.


Has he forgotten that the states where protests took place are APC states? I was very glad to read the reaction of former APC National Vice-Chairman, North-East, Salihu Moh’d Lukman, who blasted Morka by saying that it is the height of dishonesty to say that opposition parties were behind the protests. But that is the political side of it, and I’m sure Felix Morka knew he was dealing in falsehood as he penned those lines.


For me, and for every Nigerian, government must come to terms with the crisis ignited by the removal of petrol subsidy. There is nowhere in the world where subsidies are removed from the poor, while the well-heeled are empowered by the state with more resources to fund extravagant lifestyles. I am of the opinion that government must lead the patriotic show in the interest of the corporate existence of our country to see how the cost of fuel energy can be halved immediately, in the first instance.

If a way can be found, for instance, to get people to buy petrol at, say N350, and diesel, at say, N550, we would be on the way to relieving our people of very heavy burdens. One direction to look is how the Dangote and Port Harcourt refineries can be of service to ALL Nigerians in this regard. The alternative is a road to Venezuela, with Zimbabwe as a bus-stop. These are not funny destinations.

*Adekoya is a commentator on public issues

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