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Subsidy: No matter how long you’ve traveled in wrong direction…



Subsidy: No matter how long you’ve traveled in wrong direction... by Jideofor Adibe

There is a saying that no matter how long you have been travelling in the wrong direction, the best solution remains to turn back. 

This was what came to my mind when I read the story that the government had eventually decided to ‘remove’ subsidies on premium motor spirits otherwise known as petrol or fuel. 

By the time Buhari was sworn in as President on May 29 2015, there had been more or less a consensus that the subsidy regime was a cesspool of corruption and deserved to be done away with. 

The Farouk Lawan, Aig-Imoukhede and Nuhu Ribadu investigations into various aspects of the oil industry and subsidy regime had revealed mind-boggling corruption. 

There was therefore a huge expectation that doing away with the subsidy regime would be a priority for  the new Buhari government especially as the government came to office with massive goodwill, bountiful legitimacy and the ‘blessing’ of long queues in filling stations, with fuel selling in many places for more than N200 per litre. 

A number of reasons could explain Buhari’s inability to act decisively on the issue: 

He was known to have assiduously opposed subsidy removal under Jonathan, and so could have assumed that to turn around to embrace what he had opposed all along, would undermine his integrity – his key marketing point among his supporters.  

The President also probably felt that the subsidy regime ran into problem under former President Jonathan because of corruption and that sanitizing the system of corruption could make subsidies on petrol sustainable. 

There is equally the fact that the majority of his supporters are ordinary Nigerians and he might have felt that any policy that seriously hurts his primary constituency would be an act of betrayal.  

The point is that the Buhari regime eventually had to do the ‘needful’ but in a manner that left bitter taste in the mouth. 

The announcement of the price hike was more of an ambush – just as the Jonathan administration did in January 2012. 

I don’t think there is any reason for Buhari to appear apologetic for previously supporting removal of subsidies and then changing his mind later in the light of changing circumstances or new evidence. 

It is only change that does not change and a person who refuses to change as circumstances change will be called inflexible. 

I believe however that the current crisis engendered by the fuel price hike should be another learning curve for the government and an opportunity for deep reflection on its approaches to governance:

One of the lessons the government should learn from the current crisis is not to allow its functionaries to speak in discordant tune – as it does so often on several issues.  

For instance when on January 18, 2016 the federal government  reduced the price of fuel from N97 to N86.50k per litre, it claimed that the reduction was due to an implementation of the revised component of the Petroleum Products Pricing Template for PMS and household kerosene.

The Minister of State for Petroleum Dr Ibe Kachikwu was later to announce that fuel subsidy had been removed through some form of ingenuity and that the country was saving $1bn in subsidy removal and $1bn in fuel importation. 

The government also thumped itself on the chest that “for the first time”, our refineries were ready to work, that crude was being pumped from Brass to Port Harcourt, that pipeline was being used for the first time in 10 years  and that crude was being pumped to Ilorin for the first time in ten years. 

Though the announcements did little to shorten the length of the queues in filling stations, they somehow gave the impression that the situation was under control. 

Dr Ibe also gave several unmet deadlines on when the queues in filling stations would disappear. 

Then ‘gbaaam’ came the announcement from the blues that the price of fuel had been increased to N145 per litre.  

People were understandably furious. 

The thinking in many people’s mind was: Did they not say they had creatively removed fuel subsidy? 

As if to add to the confusion, the Vice President Professor Yemi Osibanjo claimed that contrary to reports, that the government had not removed any subsidies and that what it did was to withdraw the monopoly hitherto enjoyed by the NNPC to allow free market sales and that the decision was because of the non-availability of foreign exchange for the independent marketers to import fuel. 

Days after the Vice President’s personally signed statement on the new fuel price Dr Ibe appeared to contradict him when he was quoted by Thisday of May 16 as saying that the federal government would have had to cough up N16.4 billion every month to offset the subsidy claims of oil marketers “had it not taken the decision to remove the subsidy on petrol.” 

This pattern of contradictory talks and signals from top officials of the government has been common with this government.

 Another important lesson for the government, which goes beyond the issue of removing subsidies but which I believe is creating problems for the regime  is its approach for fighting corruption. 

It is well for the EFCC to thump its chest on the amount of money it claimed it recovered from suspected corrupt individuals. 

But what the EFCC is unable to tell us is the cost of its ‘fight’. 

Not only do I believe that its system of media trial is de-marketing the country, there is a suspicion that wealthy individuals are unduly being cautious about spending money. 

Both effects are hurting the economy and Nigerians. 

I wish the President had honoured his earlier pledge that he would not be unduly concerned with what people did in the past but would look forward. 

This would not have been incompatible with his determination to recover looted funds. 

Obasanjo recovered looted funds in the early life of his regime without much ado. 

The President seemed to have succumbed to those baying for the blood of real and imaginary oppressors.

With labour threatening strike over the fuel price increase and crises suddenly becoming pervasive all over the land amid increasing hardship, the government should consciously make friends and engage with aggrieved groups – rather than reveling in a macho image and setting up numerous social forces against it or regarding voices of dissent as voices of those trying to undermine the regime. 

Most Nigerians believe the government means well. 

The government should therefore do more to cultivate even those who oppose it to be able to have the necessary space to leave a lasting legacy. 

Military solution alone cannot assuage the issue of grievances, including with insurgency groups like Niger Delta Avengers and   Biafra agitators. 

Related to this is that the government should go soft on the tendency to demonize the former President.

History teaches us that the identity that is perceived to be under threat is the one most vociferously defended. 

In the wake of the 2015 presidential election for instance many analysts warned of possible renewed militancy in the Niger Delta if Jonathan lost and possible prolonged post-election violence in several parts of the North if Buhari lost. 

A common recommendation to overcome this from many analysts was for whoever won the election to treat the other as a co-winner. 

This has not happened under this regime. 

And it does not necessarily mean that the former President should not be made to account for his time in office. 

But it should be done with respect for the office he occupied.  

We cannot rule out the possibility that at least part of the causes of the renewed militancy in the region is because of that demonization.

It should be recalled that the Yoruba came out to fight for revalidation of Abiola’s mandate after an election he won was annulled not  necessarily because he was loved by them (he constantly opposed Awolowo, the people’s icon) but because that annulment was regarded as a slight on ethnic pride. 

We know what followed with NADECO and others. 

We can therefore assume that some of the neo-insurgents in the region are reacting out of a perception that their identity is being maligned. 

Today neo insurgency activities have reduced oil production from 2.2mbd to barely 1.4 mbd – at a time the country’s economy is in dire straits. 

While the government deserves credit for carrying the fight to Boko Haram, it will be unhelpful for it to defeat the group only to confront other Boko Harams in other parts of the country.

Jideofor Adibe, Email: pcjadibe@yahoo.com, Twitter: @JideoforAdibe

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