It is no longer news that life has become very tough in the country. A couple of economic reform policies have impacted negatively on the majority of the people who had no hand in how things went bad. The most notorious of the reforms is the removal of subsidy on petrol, which has had spiral effects on the prices of goods and services, worsening the double-digit inflation which at the last count hovered around 24.08 per cent.
Though celebrated by perceptive analysts as a correct reform, the implementation would appear to have underestimated the unintended, but expected short-term negative impact, which now threatens to blow up in a major social crisis with organised labour offering a vanguard role if the federal government fails to match its promises of alleviation of the peoples’ pains with action.
Earlier this week, the Nigerian Labour Congress threatened to call on workers to shun work indefinitely anytime next week. The threat came barely a week after it embarked on a two-day warning strike that disrupted economic activities in several states of the federation. Its complaint was that the federal government had absconded from the table where its demands for palliative measures were being discussed.
President Bola Tinubu had demonstrated political courage in implementing the petrol subsidy removal policy which had been on the table since 1999. President Muhammadu Buhari showed a similar courage in 2015 when he removed the subsidy but was to backslide less than a year later, introducing under-recovery, a euphemism for subsidy. Things only grew worse as the bad economic practice moved from several billion to trillions of naira per annum. In 2022 alone, the Nigerian National Petroleum Company Ltd spent $9.7 billion (N4.39 trillion) on subsidies, denying the Federation Account of any inflows for several months.
Obvious that the nation was heading for economic disaster with the huge spending on petrol subsidies, the Buhari administration proposed a stop in June 2022, pushed it forward to December of that year, and eventually refused to provide funds for it in its 2023 Appropriation Act effective from June 2023. Tinubu, however, implemented the policy a month ahead, declaring in his inauguration speech on 29 May 2023, “Subsidy is gone.”
Not a few policy analysts and social critics felt that while the reform was correct, its implementation would appear to have been too sudden, and without a strategic plan to ameliorate its short-term negative impact, particularly on the vulnerable people. Expectedly, organised labour, including the NLC and the Trade Union Congress kicked for obvious reasons: their members, whose paychecks had stagnated for a while would bear the brunt of the new policy if there was no commensurate increase in wages.
The initial reaction of the Tinubu administration was commendable as it went into negotiations with labour over its demands for palliative measures, including wage increase and the age-long need to refine petroleum products locally. The president set up a committee to negotiate the demands and propose a workable agreement that would put a smile on everyone’s face.
However, labour has been complaining that the government has abandoned the negotiation, and would need to be forced back to the discussion table. It is difficult to believe labour’s narrative because no responsible government would fail to appreciate the restraint demonstrated by the workers so far. In fact, they had shifted ground from insisting on subsidy to contending that local refining ought to precede the policy, opting to accept a commitment from the government that domestic production would come on stream at an appointed date.
Without a doubt, a strike would further weaken the fragile economy that is already on its knees. So, it’s tempting to either plead with labour to shelve its proposed action or to outrightly call it out not to endanger the economy. But the fact of the matter is that the situation on the ground is dire. Many Nigerians are barely surviving with the high cost of living, so much so that with the top-of-the-roof cost of transportation, workers are unable to commute to work. High transportation cost has also affected the prices of food. On top of this is the upping of school fees across the board as well as the increasing cost of healthcare.
Recognising the hardships in the land, Tinubu in a nationwide broadcast late in July rolled out a series of short-term measures aimed at ameliorating the pains. It included releasing 200,000 MT of grains for households; 225,000 MT of fertiliser and N200 billion for farmers to cultivate maize, rice, wheat and cassava; N75 billion for 100,000 MSMEs; N50 billion for Nano businesses; N75 billion for manufacturers; and N100 billion for 3,000 gas-powered buses.
While labour initially welcomed the palliatives, but was sceptical about their implementation, the sluggish delivery of the ameliorating measures would appear to have justified its scepticism and impatience. Though the Tinubu administration could be excused on the ground that it just got off the ground with the recent appointment and assigning of ministers, it is important that it gets around the table with labour for confidence-building talks to assure the workers that the implementation of the measures for the mitigation of the short-term pains would be steadfast.
It is worth noting that the national experience is the stonewalling of aggrieved citizens by the government until they resort to mass action. The Tinubu administration, whose leadership had been part of such protests for decades, needs to change this narrative. It should, therefore, return to the table to iron out the demands of labour in order to prevent the disruption of the prevailing delicate peace. At that table, labour also needs to be realistic about its demands as several years of damage cannot be fixed within a short time.
Adebiyi, the executive editor of Western Post, is also a member of the Editorial Board of THISDAY Newspapers
First published on THISDAY Newspapers