₦airaland Forum

Zacch Adedeji offered perhaps the simplest explanation of Nigeria's old fuel-subsidy problem:

Borrow ₦10 to buy a product. Sell it for ₦3. Government absorbs the remaining ₦7. Repeat.

If government itself must borrow to fund that difference, it isn't sustainable relief. It is deferred debt.

That, Adedeji argues, was what Tinubu confronted in 2023. Nigeria wasn't merely spending surplus revenue to make petrol cheaper; it was financing the widening difference between actual cost and consumer price.

So the question isn't simply, "Why did Tinubu remove subsidy?"

It is: How long could Nigeria keep borrowing to buy at ₦10 and selling at ₦3?

Subsidy removal undeniably hurt Nigerians through higher transport, food and household costs. Government therefore has a responsibility to convert improved revenues into infrastructure, transport, education, jobs and household relief.

But hardship doesn't erase the underlying arithmetic:

Borrow ₦10. Sell for ₦3. Repeat indefinitely.

That wasn't a sustainable economic policy. It was postponing the bill.

CharlesCNG:
Zacch Adedeji offered perhaps the simplest explanation of Nigeria's old fuel-subsidy problem:

Borrow ₦10 to buy a product. Sell it for ₦3. Government absorbs the remaining ₦7. Repeat.

If government itself must borrow to fund that difference, it isn't sustainable relief. It is deferred debt.

That, Adedeji argues, was what Tinubu confronted in 2023. Nigeria wasn't merely spending surplus revenue to make petrol cheaper; it was financing the widening difference between actual cost and consumer price.

So the question isn't simply, "Why did Tinubu remove subsidy?"

It is: How long could Nigeria keep borrowing to buy at ₦10 and selling at ₦3?

Subsidy removal undeniably hurt Nigerians through higher transport, food and household costs. Government therefore has a responsibility to convert improved revenues into infrastructure, transport, education, jobs and household relief.

But hardship doesn't erase the underlying arithmetic:

Borrow ₦10. Sell for ₦3. Repeat indefinitely.

That wasn't a sustainable economic policy. It was postponing the bill.

Zach analogy is painfully simple.

If you borrow ₦10 to buy something and deliberately sell it for ₦3, the missing ₦7 has not disappeared. Somebody must pay it.

If government is using surplus revenue, that is a subsidy.

If government is borrowing to cover the difference, then the “cheap” price is being financed with future debt.

That is the real problem the old system created: Nigerians enjoyed a lower pump price today while the bill was quietly transferred to tomorrow through borrowing, lost public revenue and pressure on the wider economy.

It is like a family buying food on credit every day and celebrating that dinner is cheap. The meal may look affordable, but the debt collector is still keeping the real account.