The National Chairman of the All Progressives Congress, Professor Nentawe Yilwatda, has cautioned against former Vice President Atiku Abubakar’s proposal to restore fuel subsidy, warning that the policy could place fresh pressure on government finances and undermine recent economic reforms.
Yilwatda said a return to the subsidy regime could affect the ability of governments to pay workers’ salaries, fund education, develop infrastructure and meet other financial obligations.
He made the remarks in Abuja while receiving a delegation of economic stakeholders, according to a statement issued on Sunday by his Special Adviser on Media and Information Strategy, Abimbola Tooki.
The APC chairman argued that the subsidy debate should not be driven solely by the prospect of cheaper petrol, but should also take into account the cost to government and its wider implications for the economy.
“The former Vice President, Atiku Abubakar’s proposal to restore fuel subsidy raises fundamental questions about how such a policy would be financed and sustained without returning Nigeria to the cycle of fiscal pressures that characterised the previous arrangement
Subsidy may appear attractive because it promises cheaper petrol, but Nigerians must also ask the bigger question: who pays for the subsidy and what happens to the resources that government must divert to finance it? A policy cannot be judged only by its immediate benefit at the pump. We must examine its impact on government revenues, salaries, pensions, education, healthcare, infrastructure and the overall capacity of government to meet its obligations to citizens.”
Yilwatda recalled that several states previously experienced difficulties meeting salary and pension obligations, with some unable to make full payments to workers.
He attributed the improved financial position of states in part to higher federal allocations following the removal of fuel subsidy, and urged Nigerians to consider the consequences of reversing the policy.
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The APC chairman also raised concerns about the possible impact of subsidy restoration on education, pointing to disruptions in university education under the previous administration.
“The APC chairman also drew attention to the education sector, recalling the prolonged disruption of academic activities in Nigerian universities under the previous administration. Nigerians should be concerned about policies that could weaken the capacity of governments to finance education and other essential public services.
A return to a fiscally unsustainable subsidy regime could have consequences far beyond the price of petrol. When government revenue is squeezed, the first victims are often the critical sectors that directly affect the welfare and future of our people.”
On workers’ wages, Yilwatda said the government’s ability to sustain the current minimum wage should form part of the discussion, stressing that increased salaries must be backed by sufficient revenue.
He maintained that wage commitments should not undermine spending on infrastructure, healthcare, education and other essential services.
Yilwatda further highlighted developments in Nigeria’s digital payment ecosystem, saying the reforms were creating greater opportunities for young Nigerians, freelancers and content creators to receive international payments.
“Our young people are no longer limited by geographical boundaries. A Nigerian content creator, software developer, consultant or freelancer can provide services to clients anywhere in the world. But that opportunity requires a financial and payment system capable of supporting the global digital economy.
“We must therefore be careful about policies that could undermine the progress being made in strengthening Nigeria’s financial and digital ecosystem. The APC National Chairman also highlighted the Nigeria Education Loan Fund, describing it as an important intervention that has expanded access to tertiary education financing and reduced the immediate financial burden on many families.
“He said sustainable financing for education was critical to ensuring that young Nigerians are not forced to abandon their studies because their parents cannot afford tuition and other educational expenses.”
The APC chairman said Nigeria’s economic policy should prioritise sustainable growth rather than continued dependence on expensive government interventions.
He, however, acknowledged the hardship Nigerians have faced since the removal of subsidy and called for stronger measures to protect vulnerable citizens from its effects.
“The hardship Nigerians have experienced is real, and government must continue to respond to it. But the answer cannot simply be to return to a system whose long-term fiscal implications created serious distortions in our economy.
“What Nigerians deserve is an economy that can sustainably finance good wages, quality education, healthcare, infrastructure and social protection without depending on an opaque and expensive subsidy system. Whenever anybody proposes a return to subsidy, Nigerians should ask: how much will it cost?
Where will the money come from? What programmes will be sacrificed to finance it? And for how long can the government sustain it? These are legitimate questions that must be answered before the country embarks on another expensive policy experiment.”
President Bola Tinubu ended the fuel subsidy regime on May 29, 2023, during his inauguration, fulfilling a major campaign pledge. The decision led to a sharp increase in petrol prices and contributed to higher costs of goods and services, although the APC-led Federal Government has continued to defend the reform as beneficial to the economy.
Atiku, who had also pledged during the 2023 presidential campaign to remove fuel subsidy if elected, recently said he would restore the policy if elected in the January 2027 presidential election, arguing that it would help ease the burden of subsidy removal on Nigerians.
The proposal has since attracted varied reactions from the public.