Opinion
NNPC And The Road Task Scheme
What do we call the recent story about the federal executive council (FEC) approving N621.2 billion for the Nigerian National Petroleum Corporation (NNPC) to take over the reconstruction of 21 federal roads across the six geopolitical zones of the country? Misplaced priority? Another drain pipe? Or what? As usual, a beautiful story was coined and sold to Nigerians to make them see reasons with the plan. The interesting tale is that the National Union of Petroleum and Natural Gas Workers (NUPENG) had decried the loss of its members and property to dilapidated roads — but NNPC appealed to the union to shelve the planned strike and accepted to rebuild some roads.
The Executive Order No. 007 signed by President Muhammadu Buhari in 2019, was latched on by the NNPC to embark on the construction of 21 roads across the country. E07 of 2019 or “the scheme”, according to records is a strategic intervention under the Federal Government Road Infrastructure and Refreshment Tax Credit Scheme which allows the private sector to deploy in advance the taxes they would pay for infrastructure development. While some people criticised the initiative, others have applauded it, saying it will bring about speedy infrastructural development in the country.
But the purpose of this article is not to examine the pros and cons of Executive Order No. 007. My concern is rather why the national oil company should dabble into road construction when it has not delivered on its primary responsibility of ensuring energy security in the country. Currently, none of the nation’s four refineries is working. Sometime last year, the government announced for the umpteenth time that the refineries would soon come back to life. The Minister of State for Petroleum, Timipre Sylva, specifically told the nation that the Port Harcourt refinery would become operational again before the end of the year.
That was never to be. Some days back, yet another promise was made. This time around the Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari, stated that the facility had been completed and that operations at the 60,000 barrels per day refinery would commence in the first quarter of 2023. No thanks to the Russian/Ukrainian war, many oil producing countries have become richer as the war has resulted in the increased price of oil in the international market. But here, in Nigeria, we have gained nothing. Instead, we are suffering even more than those that are not blessed with crude oil because our refineries are not working. We have to export our crude oil and import the refined product at a very high
Fuel scarcity has become almost a permanent thing in many parts of the country. In the Federal Capital Territory for instance, there has not been a whole month of lack of fuel since February last year. Currently, the situation in the FCT is very precarious. People spend hours/days at petrol stations struggling to get the product for their daily uses. Even in the states where there is no scarcity, the price of the commodity is way above the approved pump price. In some places, it is sold for as high as N300.00 per liter at the filling stations. Owners of filling stations now seem to be at liberty to fix whatever prices they like for the product.
The big question is, since NNPC is so buoyant, why don’t they fix the refineries so that importation of fuel will stop and Nigerians can have petrol in their cars without hassles? Meanwhile, the same NNPC, now a limited liability company, is reported not to have made any remittances into the federation account from revenues generated for several months now, blaming it on billions paid as a shortfall for the importation of petrol (subsidy). Again, since under the watch of the NNPC, even with the president as the Minister for Petroleum, the nation’s refineries have remained non-functional for many years, what is the assurance that the roads they will construct will work?
What will be the quality of these roads? Will this not go the way of other government projects in the country where one project is budgeted for almost every year with outrageous sums of money released, yet there will be little or nothing to show for it? Who will monitor these projects to ensure compliance with the best standard? As some people have also rightly asked, is the NNPC now so free to dip its hands into the nation’s oil revenue and use funds generated for the nation and expend the funds to build roads rather than paying it into the nation’s account and allowing the Federal Ministry of Works to perform its constitutional role?
Some valid concerns have also been raised about the spread of the projects across the various geopolitical zones in the country. According to the Minister of Works and Housing, Babatunde Fashola, nine of the selected projects will be in north-central, three in north-east, two in north-west, two in south-east, three in south-south, and two in south-west. Is there any reason why one zone will have nine of its roads constructed while another zone will get only two? What is the rationale behind it? Those that should know have always posited that the cost of road construction in the Southern part of the country far outweighs that of the north because of the topography of the regions and other environmental factors. The same goes with the durability of the roads.
It therefore should have been expected that the southern part of the country, particularly the South- South should have been considered more in the allocation of the project or better still, let every zone get equal attention. Yes, almost every part of the country has some death traps called roads but some are worse than the others. For instance the Enugu/Makurdi/Abuja road is in a very sorry state and it is shocking not to see it among the roads to be handled by the benevolent NNPC. Any reasonable person that plies this road would wonder how an important road that links the South-East with the North and vice versa should be allowed to deteriorate so much.
From Otukpa, Benue State down to Obollo Afor Enugu State, the road is a no, no. The worst spots are Inyi and Amala Egashi, Enugu State. The coal tar on these portions of the road had since been completely washed out and the road had turned deep gullies. You ply the road with your heart in your mouth, seeing heavy duty vehicles and trailers drive through the gullies with their loads. Nigeria is in dire need of unity and those in authority both now and in the future should be seen to be championing the course of a united country through appointment of people into government offices, allocation of projects and many more.
All this lopsidedness in the affairs of government, favouring one particular region or tribe at the detriment of others can only fuel the cry for marginalization and deny the country the much needed peace and unity. Most importantly, NNPC should first of all tackle the issue of the crisis in the energy sector in the country – oil theft, non-functional refineries, fuel scarcity, corruption and many more, before talking of constructing roads. Again, the Road Infrastructure and Refreshment Tax Credit Scheme of the federal government may be a good idea but considering the level of corruption and insincerity in the country, will it yield the best result?
By; Calista Ezeaku
Opinion
A Renewing Optimism For Naira
Opinion
Don’t Kill Tam David-West
Opinion
Fuel Subsidy Removal and the Economic Implications for Nigerians
From all indications, Nigeria possesses enough human and material resources to become a true economic powerhouse in Africa. According to the National Population Commission (NPC, 2023), the country’s population has grown steadily within the last decade, presently standing at about 220 million people—mostly young, vibrant, and innovative. Nigeria also remains the sixth-largest oil producer in the world, with enormous reserves of gas, fertile agricultural land, and human capital.
Yet, despite this enormous potential, the country continues to grapple with underdevelopment, poverty, unemployment, and insecurity. Recent data from the National Bureau of Statistics (NBS, 2023) show that about 129 million Nigerians currently live below the poverty line. Most families can no longer afford basic necessities, even as the government continues to project a rosy economic picture.
The Subsidy Question
The removal of fuel subsidy in 2023 by President Bola Ahmed Tinubu has been one of the most controversial policy decisions in Nigeria’s recent history. According to the president, subsidy removal was designed to reduce fiscal burden, unify the foreign exchange rate, attract investment, curb inflation, and discourage excessive government borrowing.
While these objectives are theoretically sound, the reality for ordinary Nigerians has been severe hardship. Fuel prices more than tripled, transportation costs surged, and food inflation—already high—rose above 30% (NBS, 2023). The World Bank (2023) estimates that an additional 7.1 million Nigerians were pushed into poverty after subsidy removal.
A Critical Economic View
As an economist, I argue that the problem was not subsidy removal itself—which was inevitable—but the timing, sequencing, and structural gaps in Nigeria’s implementation.
- Structural Miscalculation
Nigeria’s four state-owned refineries remain nonfunctional. By removing subsidies without local refining capacity, the government exposed the economy to import-price pass-through effects—where global oil price shocks translate directly into domestic inflation. This was not just a timing issue but a fundamental policy miscalculation.
- Neglect of Social Safety Nets
Countries like Indonesia (2005) and Ghana (2005) removed subsidies successfully only after introducing cash transfers, transport vouchers, and food subsidies for the poor (World Bank, 2005). Nigeria, however, implemented removal abruptly, shifting the fiscal burden directly onto households without protection.
- Failure to Secure Food and Energy Alternatives
Fuel subsidy removal amplified existing weaknesses in agriculture and energy. Instead of sequencing reforms, government left Nigerians without refinery capacity, renewable energy alternatives, or mechanized agricultural productivity—all of which could have cushioned the shock.
Political and Public Concerns
Prominent leaders have echoed these concerns. Mr. Peter Obi, the Labour Party’s 2023 presidential candidate, described the subsidy removal as “good but wrongly timed.” Atiku Abubakar of the People’s Democratic Party also faulted the government’s hasty approach. Human rights activists like Obodoekwe Stive stressed that refineries should have been made functional first, to reduce the suffering of citizens.
This is not just political rhetoric—it reflects a widespread economic reality. When inflation climbs above 30%, when purchasing power collapses, and when households cannot meet basic needs, the promise of reform becomes overshadowed by social pain.
Broader Implications
The consequences of this policy are multidimensional:
- Inflationary Pressures – Food inflation above 30% has made nutrition unaffordable for many households.
- Rising Poverty – 7.1 million Nigerians have been newly pushed into poverty (World Bank, 2023).
- Middle-Class Erosion – Rising transport, rent, and healthcare costs are squeezing household incomes.
- Debt Concerns – Despite promises, government borrowing has continued, raising sustainability questions.
- Public Distrust – When government promises savings but citizens feel only pain, trust in leadership erodes.
In effect, subsidy removal without structural readiness has widened inequality and eroded social stability.
Missed Opportunities
Nigeria’s leaders had the chance to approach subsidy removal differently:
- Refinery Rehabilitation – Ensuring local refining to reduce exposure to global oil price shocks.
- Renewable Energy Investment – Diversifying energy through solar, hydro, and wind to reduce reliance on imported petroleum.
- Agricultural Productivity – Mechanization, irrigation, and smallholder financing could have boosted food supply and stabilized prices.
- Social Safety Nets – Conditional cash transfers, food vouchers, and transport subsidies could have protected the most vulnerable.
Instead, reform came abruptly, leaving citizens to absorb all the pain while waiting for theoretical long-term benefits.
Conclusion: Reform With a Human Face
Fuel subsidy removal was inevitable, but Nigeria’s approach has worsened hardship for millions. True reform must go beyond fiscal savings to protect citizens.
Economic policy is not judged only by its efficiency but by its humanity. A well-sequenced reform could have balanced fiscal responsibility with equity, ensuring that ordinary Nigerians were not crushed under the weight of sudden change.
Nigeria has the resources, population, and resilience to lead Africa’s economy. But leadership requires foresight. It requires policies that are inclusive, humane, and strategically sequenced.
Reform without equity is displacement of poverty, not development. If Nigeria truly seeks progress, its policies must wear a human face.
References
- National Bureau of Statistics (NBS). (2023). Poverty and Inequality Report. Abuja.
- National Population Commission (NPC). (2023). Population Estimates. Abuja.
- World Bank. (2023). Nigeria Development Update. Washington, DC.
- World Bank. (2005). Fuel Subsidy Reforms: Lessons from Indonesia and Ghana. Washington, DC.
- OPEC. (2023). Annual Statistical Bulletin. Vienna.
By: Amarachi Amaugo
-
City Crime2 days ago
RSG Ready For 2030 Digital Transformation
-
Opinion2 days agoA Renewing Optimism For Naira
-
Niger Delta4 days agoRSG Tasks NIS On Expatriate Attachee Policy
-
Business2 days agoFG Fixes Uniform Prices for Housing Units Nationwide, Approves N12.5m For 3-bedroom Bungalow ……..Says Move To Enhance Affordability, Ensures Fairness
-
Politics4 days agoTinubu Swears In New INEC Chairman
-
News2 days agoReps Summon NAFDAC, Police, Others For Illicit Drug Probe
-
Niger Delta2 days ago
Coy Advocates Indigenous Innovation For Africa’s Energy Future
-
News2 days agoDangote Begins Refinery Expansion To 1.4mbpd
