By Abdulrauf Aliyu
Taiwo Oyedele insists that the proposed 5 percent fuel levy is nothing new. It has always been in Nigerian law, he says, only not implemented, and more than 150 countries already have it. This is meant to reassure Nigerians. In reality, it reveals a failure to understand that taxes do not operate in a vacuum. A levy works only within the right institutional ecosystem. Without that, it becomes just another burden.
In countries where fuel levies support infrastructure, they are tied to dedicated road funds. These funds are ring-fenced, legally protected from diversion, and managed by independent agencies that citizens trust. Revenues are audited, projects are prioritized transparently, and delivery is monitored. That is why a fuel levy in those places can actually reduce logistics costs.
Ghana offers one example. Its Road Fund, financed through a levy on petroleum products, is managed by an independent board that allocates funds for maintenance and rehabilitation. Citizens can point to projects funded this way, even if challenges remain. Kenya provides another model with its Road Maintenance Levy Fund, administered by the Kenya Roads Board. The levy is earmarked specifically for road upkeep, and the agency is legally obliged to publish how the money is spent.
Zambia also channels a fuel levy into its National Road Fund Agency, which has clear oversight structures and is designed to insulate road financing from the volatility of annual budgets. In Tanzania, the Road Fund Board manages fuel levy revenues with a mandate to ensure sustainable road maintenance. In South Africa, the South African National Roads Agency Limited (SANRAL) manages both toll revenue and levies, operating with professional independence and audited transparency. Even in Uganda, the Road Fund is ring-fenced and overseen by a separate board that reports to Parliament.
These six cases illustrate a simple truth: a levy by itself does not build or maintain roads. Institutions do. Where road funds exist, where agencies are empowered and independent, and where citizens can trace the link between what they pay and what they see, levies can deliver.
Nigeria, by contrast, has the Federal Roads Maintenance Agency (FERMA). On paper, FERMA should be our equivalent. In practice, it is politically entangled, chronically underfunded, and dependent on the same treasury allocations that starve every other agency. Its activities are opaque, its autonomy questionable, and its performance inconsistent. Nigerians already pay multiple road-related charges — state road taxes, tolls, and annual budget allocations. Yet they still drive on cratered highways, swerving around potholes like slalom racers. If the existing funds produce so little, why should another levy be any different?
This is why Oyedele’s “150 countries” defense collapses under scrutiny. Comparative fiscal policy cannot be reduced to counting heads. It must consider context. The countries he references often have credible institutions, robust oversight, and trust between government and citizens. Nigeria does not. Copying the outward form of their policies without their underlying capacity is isomorphic mimicry — imitation without substance.
Even more troubling is the government’s claim that this levy will reduce logistics costs and lower inflation. In the short run, this is simply untrue. Higher fuel costs feed directly into higher transport fares. Traders pass the costs on. Inflation rises. No serious economic reasoning can deny this. Nigerians understand it better than anyone, because they see it every time they buy pepper or take a bus.
In the long run, the only way such a levy could reduce costs is if the funds are used efficiently, transparently, and consistently for road infrastructure. That requires independent agencies and a credible road fund. Without them, revenues will vanish into the black hole of recurrent expenditure. Citizens will pay more at the pump and see little change on the road.
Nigeria’s problem is not the absence of levies. It is the absence of credible institutions. Until government demonstrates that it can fix leakages, manage funds transparently, and deliver visible infrastructure with the money it already collects, new taxes will remain empty promises.
Fuel levies without credible road funds are not reform. They are improvisation dressed up as policy. Nigerians have seen enough of that.
