The presidential candidate of the Nigeria Democratic Congress (NDC), Peter Obi, has defended the removal of petrol subsidy, saying the policy itself was necessary but the management of the funds recovered from it has been problematic.

Obi spoke on Monday during a panel session at the Nigerian Bar Association (NBA) Annual General Conference in Port Harcourt, Rivers State.

The former Anambra State governor argued that the mismanagement of subsidy savings should not be used as an argument for reversing the policy, insisting that the funds ought to have been channelled into productive sectors capable of improving Nigerians’ living conditions.

“Well, I subscribe, and I maintain that you need to remove subsidy. Mismanagement of the proceeds should not be the reason for not removing it,” Obi said.

According to him, the government should have provided Nigerians with clear alternatives for the resources saved through subsidy removal, particularly by investing in critical sectors such as healthcare.

“What we should have done is that when we remove subsidy, we would have given the people an alternative usage for the subsidy,” he said.

Obi alleged that the resources recovered since the subsidy was removed had not been adequately managed, arguing that Nigerians had yet to see corresponding benefits from the savings.

“What we have today is that that removal and attendant resources being recovered are also being mismanaged and stolen,” he said.

The NDC presidential candidate claimed that the Federal Government had received about N16 trillion from subsidy-related savings, arguing that such funds could have been deployed strategically to transform the country.

“For example, we have received, according to them [the Federal Government], N16 trillion. I said it before; go to my manifesto and see where I said I would remove subsidy,” he stated.

Obi said his approach would have involved a structured process for removing the subsidy while ensuring that the resources saved were either invested in priority sectors or preserved for future national development.

“We’ll do it in an organised manner, and whatever we recover will be invested appropriately,” he said.

He further suggested that the government could have saved part of the funds through the Sovereign Wealth Fund, arguing that such a strategy would have strengthened Nigeria’s financial position and created additional resources for development.

“If they had saved the money and decided to do like any other country, we would have had $10 billion added to the sovereign wealth fund,” Obi said.

He maintained that the central issue was not necessarily the removal of the subsidy but what government chose to do with the resources generated from the policy.

“So it’s what you use the money for that is the problem,” he told the gathering.

President Bola Tinubu announced the removal of petrol subsidy during his inauguration on May 29, 2023, leading to a sharp increase in petrol prices and triggering widespread economic pressures.

The policy has remained one of the most contentious aspects of the administration’s economic reforms, with the Federal Government maintaining that money previously spent on subsidy payments has been redirected to other areas of national development.

Obi, however, insisted that Nigerians should be able to identify tangible benefits from the enormous resources freed by the policy.