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*Nigeria: Fuel Subsidy Impasse - Why The President Must Sack Okonjo-Iweala Now
By Kali Gwegwe
It has been very clear right from the onset that the federal government’s fiscal plan of withdrawing fuel subsidy next year is not the idea of President Goodluck Jonathan. Nevertheless, he will have to bear whatever consequences that may arise from it. This is the major reason why the president must ignore the minority clan of well-heeled elites and stand with the Nigerian masses like he promised during the campaign season. To do this, President Jonathan would have to quickly separate reality from cheer logic as being postulated by some of his lieutenants. Like the president himself observed shortly before the nomination of his cabinet, different people are in government for diverse reasons. While some are for service, others for personal gains. There are still some who seek power just to protect the interests or agendas of third party organizations. Of greater worry are those who stay in government to deliberately give counsels that will pitch the people against government. Quite frankly, the suggestion that government removes fuel subsidy as contained in the Medium Term Expenditure Framework for 2012 is one of them.
This writer does not dismiss the fact that there are gains to be made from the removal of fuel subsidy. Nevertheless, it is quite cheerless to note that the nation’s fiscal policy formulators and team of economic advisers have declined to accept the naked fact that a coin does not have only one side. This has caused them not to acknowledge that Nigeria’s socio-economic framework is still too fragile to bear the additional burdens that will come with the removal of fuel subsidy. The burden will come in the form of a weakened purchasing power of the middle and low income class workers because the prices of transportation, house rent, foodstuff, education, and health care services among others will respond to the jump in the price of fuel. Sadly, some persons either in government or heeled enough to buy fuel even at N200 a liter have been shouting on roof tops that the federal government removed subsidy on diesel and Nigeria did not collapse. On the strength of this, they argue that nothing damaging would happen even if the same thing is done to petrol. Apart from displaying crass misunderstanding of the fundamentals of political governance, the problem with this opinion is that its promoters have deliberately refused to appreciate the major causes of poverty, disease, and crime in Nigeria over the last decade. ( Continues below..... )
Photo Above: Nigeria Finance Minister Ngozi Okonjo-Iweala
It is a fact that the increase in the pump price of diesel in 2009 jumped the cost of transportation. It jolted economic permutations because most manufacturers and entrepreneurs rely mainly on diesel-powered trucks to move their goods from factories to their distribution outlets. As expected, the additional cost brought about by the sharp increase in the cost of transportation was effortlessly tied on the neck of consumers. The prices of goods and services climbed up the ladder. Almost immediately, most Nigerians were unable to meet the basic needs of their families owing to the weakening of their purchasing power. For instance, families that survived on N10,000 monthly now needed between N15,000 and N20,000 because the price of almost every product or services that had something to do with diesel had jumped in response to prevailing market forces. The above picture is also an appropriate response to the argument by government that the money saved from the withdrawal of fuel subsidy would be invested in infrastructural development.
It is important to point out here that no responsible government will afford to consciously weaken the purchasing power of the citizens in order to develop her infrastructure. Poverty is growing in many developing countries, including Nigeria because attention is not given to the purchasing power of the citizens. Poverty is judged by the level of weakness of the purchasing power of citizens. Unfortunately, our fiscal policy formulators and economic advisers believe job creation is the only way to reduce poverty. There would still be poverty even now that national minimum wage is N18,000 per month. This is because, even N50,000 would not be enough to meet the basic needs of an average Nigerian family of five: father, mother, and three children. These basic needs include feeding, shelter, transportation, education, health care, and socials. It would therefore be suicidal for any government to ignore reality and continue to blindly pursue western crafted fiscal policies. It would be shocking for many to learn that in 2010, the European Union spent a whooping €57 billion on agricultural development programme. Of this amount, €39 billion was spent on direct subsidies. A total of 40% of EU’s budget goes to Agricultural and fisheries subsidies. Who is fooling who? The World Bank and IMF are fooling Africans. If advanced democracies do not subsidize fuel, they would subsidize agriculture, housing, transport, or health care. It is left for every government to identify the critical sector to intervene. Frankly, it would be wide of the mark for Nigeria to remove fuel subsidy because Britain or the United did so. Unfortunately, our fiscal policy formulators and economic experts are mere copy-cats. Perhaps, this was the reason why the late afro-beat icon, Fela Anikulapo Kuti asked Africans to follow western polices with caution.
As much as the development of critical national infrastructure is important, deliberate fiscal policies must also be developed side-by-side to strengthen the purchasing power of the citizens. In addition to the creation of new jobs, the removal of fuel subsidy will enable government build more roads, schools, and hospitals etc. We must however accept the fact that citizens will still pay for services rendered in the new hospitals and schools that will be built with money saved from the withdrawal of fuel subsidy. The transporters that will use the new roads and rail lines will not keep fares down because they were built with money saved from the removal of fuel subsidy. With the weakening of the purchasing power of citizens, poverty will not allow the masses to enjoy the benefits of the new infrastructure government intends to develop. ( Continues below….. )
Photo Above: President Goodluck Jonathan of Nigeria
It is not healthy for a people to forget their history too quickly. The West is not happy that Africa ran away with political independence so soon. Colonization was mainly the exploitation of human and material resources of weak nations to protect the economies of world powers. Owing largely to worldwide censure of obnoxious political cultures, Western democracies have now found it convenient to hide behind the World Bank and IMF to deny developing countries economic independence. Political independence without economic independence is as bad as colonialism. It is whispered in international circles that Africa’s economic independence will spell doom for the economies of Europe and America. This is one strong reason why African political leaders must be careful with whatever that comes out of the World Bank and IMF. It must however be noted that most Africans do not even know that they are being used to destroy the economies of their own countries. One of such person is Dr. Ngozi Okonjo-Iweala, the Coordinating minister of the Economy and minister of Finance. In one my earlier articles on fuel subsidy removal, I had described Okonjo-Iweala as “a patriot blinded by the West.” She is indeed a patriot but an involuntary victim of Western manipulations. I came to this conclusion after a very careful consideration of a wide range of issues bothering on the fundamental essence of political governance.
Good governance is the road that leads to economic growth and political stability. A prominent feature of good governance is mass participation. Because of exigencies, it will not be convenient for citizens to vote on every government policy. The masses are therefore left with no better option than to invest their confidence in elected and appointed officials. Ordinarily, these officials are supposed to protect the wider interests of the society. This has never been the case. Most elected and appointed officials simply ignore the feelings of the people and follow their shallow and narrow minds. This is responsible for why several government policies are anti-people. The planned removal of fuel subsidy is one of such policies. It would do the Nigerian masses more harm than good.
One thing has become clear following the debate that has trailed the decision of the federal government to remove fuel subsidy next year. There is no enough money to sustain the nation’s socio-economic framework. Unfortunately, the well-motivated fiscal policy formulators and hoard of economic experts have run dry of ideas to help raise the needed funds to keep the nation afloat. This problem is caused by their refusal to accept the open fact that a coin does not have only one side. They always see and reason based on the side of the coin they are facing. Little wonder why only a few wealthy Nigerians who can afford to buy a liter of fuel even at N200 are supporting calls for the removal of fuel subsidy. I am very convinced that they would all sing a different song if they earn N100,000 a month. By their mien, those calling for the removal of fuel subsidy have joined spirit with Cain who queried God for expecting him to be responsible for his brother’s safety or good.
It is the fundamental responsibility of government to see that the welfare of the citizens is protected through deliberate policies with human face. The planned removal of fuel subsidy would not have human face as far as the masses are concerned. Government should rather look for other means of raising money to fund the nation’s socio-economic framework. In the last five decades, it has been the low and middle class that have carried the burden of national transformation, leaving the wealthy few to swim in their typically questionable affluence. Government can raise up to N1 trillion by imposing 2% annual tax (for 5 years from date of purchase) on every private car above N3 million, 2% tax on every private residential house costing more than N7 million, 1% on local flight tickets/2% for international flight tickets, 2% tax on accommodation in luxury hotels, and 50% reduction in the salaries and allowances of elected and appointed government officials. ( Continues below….. )
Photo Above: Workers at work in a Nigerian oil rig
Because of the hot political wind that is blowing across Africa, Nigerian masses have been weaned and would not be ready to tolerate further abuse of their corporate rights by government. Going by the colour of anger being expressed by many, it is very likely that the masses would raise their voices against the Goodluck Jonathan administration if it goes ahead with the planned removal of fuel subsidy next year. This is the ultimate desire of the West. They want Nigeria and the rest of Africa to be continuously enmeshed in political turmoil in order to sabotage her economic recovery efforts. Already, the United States believes that Nigeria will disintegrate by 2015. Seen and unseen hands have been positioned to turn the masses against President Jonathan. In return, the Niger Delta people will be instigated to cry fowl and forced to rock the foundation that carries the destiny of Nigeria. This is the wish of the developed West. It is fore this reason that President Goodluck Jonathan should sack the Coordinating minister of the Economy and minister of Finance for not reading the hand writing on the wall. She clearly has no answers to the economic problems of the country. Nigeria needs indigenous solutions to our national problems.
The fuel subsidy culture is a shame. As the world’s sixth largest producer of crude oil, Nigeria does not have any excuse to import fuel to service local demands. The federal government can end fuel subsidy by making our four refineries work at optimum capacities. Of all the OPEC countries, the pump price of petrol is costliest in Nigeria. Why is this so? Is there anything other OPEC countries are doing that we are not? This is the question our nation’s fiscal policy formulators and economic experts should have asked themselves. Instead, they are pouncing on poor and hungry masses to cover up their incompetence. President Jonathan must sack Okonjo-Iweala now before she puts him and Nigeria in serious trouble. This country is bigger than any one single individual.
Nigeria belongs to Nigerians. The oil and gas wealth belongs to Nigerians as well. We therefore have every corporate right to enjoy the benefits of oil and gas just like citizens of other OPEC countries are doing. Let us find out how is it that a liter of petrol sells for about N18 in Saudi Arabia and just N9 in Venezuela.
The fact that our oil industry is fowled by corruption is no longer in doubt. What is in doubt is the desire or ability of government to tackle the cabal that has for so long been milking the Nigeria people dry through fuel subsidy. This writer does not however support the idea of punishing the masses through the withdrawal of fuel subsidy as an option to fight the cabal that is hiding behind subsidy to milk the nation of trillions of Naira. Making our refineries work at optimum capacity is the best way to end fuel subsidy. The pump price of fuel will climb down below N65 if petrol is refined locally. Let us study the Venezuela model and do same in Nigeria. Sack Okonjo-Iweala now! She has no answers to the problems of our national economy.
Kali Gwegwe, CEO, Nigeria Democracy Watchtower writes from Yenagoa, Bayelsa State and can be reached at email@example.com ( 0806 407 4810 )
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