Opinion
Faroukgate: Shame Of A Nation
If you are wondering why Nigeria’s ailing economy has continued to defy all known solutions, or why Nigeria’s ruling class has deliberately dithered to maintain the nation’s refineries, or build new ones that would save the world’s sixth largest oil producing nation the economic misfortune of refining its crude oil overseas, the Hon. Farouk Lawan led adhoc committee’s report on fuel subsidy management has laid that puzzle to rest.
If Farouk Lawan led committee’s report is anything to go by, Nigerians need not scratch their heads too far to know that with the present cabal of political and economic elite, it is not yet Uhuru for Nigeria and its downtrodden masses, and that all the preachments about Nigeria becoming economic haven by 2020 are just mere political rhetoric’s that are not worth anybody’s breath.
Notwithstanding the current episode that threatens Lawan’s hard-earned integrity, his committee deserves a standing ovation for letting us know some of the financial vultures in high places that have been fleecing the nation through the oil subsidy. The courageous revelations and the outstanding manner the public hearing on the oil probe was conducted made the committee an uncommon hero. The fuel subsidy probe is arguably, the most outstanding breakthrough the nation’s legislature has recorded in the past 13 years of our fledgling democracy.
The startling revelations that thundered forth from the probe report saw mind-boggling increases in payment under the subsidy regime; from N261.1billion in 2006 to N278.8 billion in 2007; and from N346 billion in 2008 to as high as N2.5 trillion in 2011. As if these increases are mere token to warrant public backlash, N999 million was allegedly paid out in a total of 128 cheques amounting to N127.872 billion within a 24-hour period on the 12th and 13th of January, 2009. It all looked like a fiction too surreal to believe.
But the fleece was not over yet. Further revelations from the report show that different departments of government could not agree on the exact amount paid the oil barons within the period of probe . While the official quoted amount was N1.3 trillion, the Accountant-General of the Federation put the figure at N1.7 trillion. Then, the Central Bank of Nigeria (CBN) came out with a different figure of N1.8 trillion. But the Lawan’s committee revealed that the actual amount paid the oil magnates was N2.5 trillion.
What other revelations do we need to ascertain that what was being subsidized over these years by the Nigerian State was not fuel subsidy, but high-level corruption of unimaginable proportion?
That Nigeria’s political class is infected by moral leprosy is a bitter truth ordinary Nigerians have learnt to swallow on daily basis. What perhaps remains a puzzle and which might weigh heavily on people’s minds is the new episode the fuel subsidy probe has entered. The twist of event reads like a well-acted Hollywood movie. I doubt if the Hollywood stars would not extend their invitation to the major actors in what has become Faroukgate.
It is a sad irony to accept that the House of Representatives has become a victim of its own trap. The $3 million-bribery allegations dangling on the neck of the two principal officers of the probe committee has made the hunter the hunted. Or how do one situate the inglorious tune the committee’s chairman, Lawan Farouk and secretary, Anthony Emenalo are currently dancing to, even naked, with their suspect, Mr Femi Otedola?
The video clip showing Farouk Lawan receiving $500,000 bribe from Femi Otedola at about 4am on April 24, and Emenalo, receiving another $120,000 bribe from the same man four hours later, totaling $620,000 out of the $3 million bribe deal, represents the ugliest moments of a nation gripped by moral leprosy. Both men, Otedola and Farouk, made a mockery of purity the while clothes they wore in the video represent.
It was not the first time Nigeria’s legislature would feast on scandal, nor the only time the well-starched apparels of our lawmakers carved in different forms of babariga, kaftan, agbada and eti’bo would be soiled. The nation has lost count of such mess in both the upper and lower chambers of the legislative arm – the Buharigate, the Etteh saga the Bankole scam and lately the pensions fund fraud and the capital market scandal that led to the fall of its investigative committee chairman, Herman Hembe. But none of these arguably, calls to question the integrity of the nation as much as the current scandal. The Faroukgate reminds one of the Watergate scandal in the United States in terms of sophistication.
Faroukgate, I presume, must be an interesting movie to watch. By the accounts given by Otedola and Lawan, both men have already whet the appetite of their prospective audience. We are not interested in who approached who for what. The two major actors have established the fact, that one approached the other and something exchanged hands. The sudden deletion of Otedola’s Zenon Oil and Gas Company and Synopsis Enterprises Limited from the list of 15 indicted companies that collected forex from PSF but did not import fuel, few hours after the ‘sting operation’, has justified the purpose. Zenon and Synopsis were said to have collected $232.975,385 and $51.449,977 respectively from the PSF without importing fuel.
But what could have led Farouk Lawan into this shady affair given his high pedigree? Could it be fear of poverty? Certainly not. The diminutive lawmaker cannot be said to be poor having been serving his Kano Federal Constituency as a four-time legislator since 1999. Going by the jumbo allowances and other estacodes the lawmakers receive, Lawan must have saved enough wads in his local and foreign accounts.
May be, he was driven by greed. But common sense ought to have dictated to him that he who goes to equity must do so with clean hands. The pint-size lawmaker ought to know that the oil mafia whose toes he had stepped on would do everything humanly possible to get back at him, and if possible, cut him to size.
I sympathise with Lawan because of his past records. He had played the hero’s script several times. He is one man who had oiled the engine of a true democracy with his alluring, sweet-sounding voice and people-responsive posture of an activist. His heroic role in the Etteh saga when his group spearheaded the removal of Patricia Etteh as the Speaker is still fresh in our memory. What then suddenly came over Farouk Lawan?
By the suspension order slammed on Lawan, the House of Representatives has tried to wash its hands off the dirty deal. The Kano-born lawmaker is now carrying his cross all alone. But the allegory of this scandal is that the Faroukgate is not just a shame of individuals. It is the shame of the entire nation.
The scam has merely extended the rogue appellation former President Olusegun Obasanjo used to designate the nation’s lawmakers to the entire nation. Of what use is a nation whose political elite are rogues and common criminals? The nation can only be derobed of this ugly appellation if the current scandal is not used as an alibi to either rubbish or overshadow the fuel subsidy probe report, as many people have speculated. After all, you don’t throw away the baby with the bath water.
There is no doubt that the Mafia’s net has caught Farouk Lawan. What is not certain yet is whether or not they would succeed in cutting the pint-size lawmaker to size. But if the $3 million scam turns out to be the curtain on Lawan’s promising political career and a final zeal on his gubernatorial ambition, Femi Otedola and his cabal of oil barons who had fleeced the nation through phantom oil subsidy must not be spared either. A bribe giver is as culpable as the bribe taker.
Boye Salau
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														Opinion
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														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
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