The National Chairman of the All Progressives Congress, Prof. Nentawe Yilwatda, has warned that former Vice President Atiku Abubakar’s proposal to restore fuel subsidy could reverse economic gains recorded under the Federal Government’s ongoing reforms.
Yilwatda said a return to the old subsidy regime could put pressure on government finances, threatening the payment of workers’ salaries, funding for education and infrastructure, and the fiscal stability of state governments.
The APC chairman made the remarks in a statement issued on Sunday by his Special Adviser on Media and Information Strategy, Abimbola Tooki.
He said reinstating fuel subsidy could return the country to an era of fuel scarcity and queues, undermine the sustainability of the current minimum wage and jeopardise education grants and other social interventions.
President Bola Tinubu announced the removal of fuel subsidy on May 29, 2023, during his inauguration, fulfilling a campaign pledge. Although the policy triggered significant increases in the prices of goods and services, the APC-led Federal Government has maintained that the reform has produced economic gains.
Ahead of the 2027 presidential election, Atiku, who also campaigned in 2023 on a promise to remove fuel subsidy, last week pledged to restore the policy if elected in the January presidential election, arguing that it would cushion the impact of subsidy removal on Nigerians.
The proposal has since generated mixed reactions.
Reacting to the development while receiving a delegation of economic stakeholders in Abuja, Yilwatda said the subsidy debate should go beyond political rhetoric and focus on how the policy would be financed 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,” he said.
Yilwatda argued that although subsidy could make petrol cheaper in the short term, the government would have to divert resources from other sectors to finance it.
“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?” he said.
The APC chairman said the impact of subsidy should be assessed beyond the price of petrol, particularly in relation to government revenue, salaries, pensions, education, healthcare and infrastructure.
He recalled that several states previously struggled to pay workers’ salaries and pensions, with some resorting to partial payments.
According to him, increased federal allocations following the removal of subsidy have strengthened the finances of many states, warning that reinstating the policy could expose governments to renewed fiscal pressures.
Education, Minimum Wage
Yilwatda also raised concerns about the possible impact of subsidy reinstatement on education funding.
He recalled the prolonged disruption of academic activities in Nigerian universities under the previous administration, saying policies that could weaken governments’ ability to finance education and other essential services should be approached with caution.
“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,” he said.
On the new minimum wage, Yilwatda said the sustainability of improved workers’ salaries should form part of the subsidy debate.
He stressed that governments must have sufficient resources to meet recurrent obligations, arguing that higher wages should not come at the expense of funding infrastructure, education, healthcare and other essential services.
Digital Economy, Student Loans
The APC chairman also highlighted what he described as improvements in Nigeria’s digital payment ecosystem under the ongoing reforms.
He said the changes were enabling more Nigerians, particularly young people, freelancers and content creators, to make and 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,” he said.
Yilwatda urged caution over policies that could undermine progress in Nigeria’s financial and digital ecosystem.
He also described the Nigeria Education Loan Fund as an important intervention that had expanded access to tertiary education financing and reduced the immediate financial burden on families.
According to him, sustainable education financing is essential to ensuring that young Nigerians do not abandon their studies because their families cannot afford tuition and other related expenses.
‘Government Must Cushion Hardship’
Yilwatda acknowledged the hardship Nigerians have experienced since the removal of fuel subsidy, saying the government must continue to implement measures to protect vulnerable citizens.
However, he argued that restoring the former subsidy regime was not a sustainable solution.
“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,” he said.
The APC chairman said Nigerians deserved an economy capable of sustainably funding decent wages, quality education, healthcare, infrastructure and social protection without relying on what he described as an opaque and expensive subsidy system.
He urged Nigerians to scrutinise the financial implications of any proposal to restore subsidy.
“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?” Yilwatda asked.
“These are legitimate questions that must be answered before the country embarks on another expensive policy experiment.”
