Removing subsidies: Anxiety lingers over planned palliatives as poverty spreads

Following the recent World Bank revelation that as many as four million Nigerians fell into the poverty trap between January and June 2023 and the subsequent warning that a further 7.1 million could plunge into the dungeon if properly targeted measures are not taken to manage the impact of fuel subsidy removal, concern is mounting over what will constitute President Bola Ahmed Tinubu's administration's stopgap package for the masses.

Palliatives in the past have included the purchase of transit buses, minimum wage increases, social investments and empowerment programs for the unemployed.

While transit buses were seen in urban cities such as Lagos, Abuja, Kaduna, Port Harcourt and a few others, minimum wage implementation was primarily a federal matter, as many states do not just couldn't pay the bill. It was even then that the implementation of social investment and empowerment programs was mired in monumental corruption.

Amid the current difficulties stemming from the withdrawal of the petrol subsidy just a month ago, a socialist trade union activist, Alex Batubo, believes that labor must rethink its strategy to meet the plethora of challenges facing faced by the working population.

“The strategy of the Nigeria Labor Congress (NLC) and the Trades Union Congress (TUC) over the past decade has included protracted negotiations, limited strike threats and generally last-minute strike cancellations. he assumption seems to have been that we have decent governments that only occasionally need to be reminded to do the right thing.We have corrupt governments that only work to enrich themselves and their friends in 'elite.

They rarely, if ever, implement the agreements they have signed with the unions,” Batubo said. He alleged that the government does not care about ordinary people, pointing out that unions need to speak to the government in a language it understands, which hurts their pockets and scares them.

He argued that Labor must literally "terrorize" the ruling elite if it is to achieve meaningful change and improve people's lives.

"The history of labor struggle in Nigeria over the past decade has shown that we need a change of strategy from the NLC and the TUC. We need solidarity within the labor movement and we must continue with strikes until the government implements its agreements.Similarly, our experience has shown that NLC/TUC strikes in individual states are unlikely to win significant gains without active support of the working class,” he said.

Expressing doubts about the government's commitment to accepting a set of mutually beneficial palliatives, Batubo said federal and state governments have repeatedly demonstrated that they are not ready to implement agreements with trade unions or even to follow the law on payment of minimum wages and pensions.

He argued that the result of the two centers of work over the past decade is that the real value of the minimum wage has never been lower, wages and pensions are generally not paid on time and that the costs of poor quality public education and health services continue to rise.

"As a result, poverty rates have increased dramatically, from around 40% to 60%, and we have experienced a massive increase in insecurity. Our union strategy must change. We need militant class struggle unionism and solidarity through the movement until we win meaningful change,” he said.

The Deputy General Secretary of the African Regional Organization of the International Trade Union Confederation (ITUC-Africa), Akhator Joel Odigie, agrees that a good set of palliatives is desirable at this stage.

However, he wondered why Nigeria could not follow in the footsteps of former Libyan strongman Muammar Gaddafi, who sold petroleum products to other countries under advantageous arrangements.

He warned against the demonization of subsidies, saying: "There is nothing wrong with subsidies per se. Several OECD governments continue to subsidize agriculture. African governments provide direct tax breaks (subsidies) to large corporations and High Income Individuals (HNI) under the guise of attracting Foreign Direct Investment (FDI) through Export Processing Zones, Special Processing Zones, etc.”

He insisted that the development of palliative programs must genuinely involve organized workers and other stakeholders in an inclusive way, adding that talking that generates pragmatic alternatives is essential, just as talking with organized groups helps to aggregate the voices of different stakeholders.

As a result, he placed great emphasis on raising the minimum wage; noting that paying decent wages helps fight poverty and inequality.

"Let's be clear, the minimum wage is not primarily for workers in the formal sector, but more necessary for workers in the informal economy who are s...