There is one very fundamental goal every
government- whether democratic or dictatorial seeks to
achieve. That goal is the socio-economic well-being of
its citizens. The well-being of citizens of any country
is mostly built on four key foundations. They include
dependable leadership, vibrant economy, rule of law, and
the culture of fair play. As important as it is, many
persons still do not appreciate the fact that without
the culture of fair play, rule of law would not be able
to support the necessary framework that would promote
the socio-economic well-being of citizens. Let us
consider the Niger Delta question. Both natives and
non-natives of the Niger Delta have come out to argue
that 13% derivation is unjust- not commensurate with the
region’s contributions to national development and
incidence of environmental degradation. It is only the
spirit of fair play that can make non-natives of the
Niger Delta region to support calls for an upward review
of derivation principle. It is however instructive to
note that the spirit of fair play is mostly a product of
the desire to apply common sense in dealing with
critical issues. Without the benefit of the wisdom of
common sense, leadership in whatever sphere or level is
bound to fail.
Incidentally, poor leadership culture is the major
problem plaguing Nigeria since becoming a nation nearly
fifty years ago. A very careful analysis of the problems
of poor political leadership in Nigeria has led to a
very shocking conclusion. Owing largely to the economic
interests of the British colonial administration, a very
faulty foundation was laid when His Royal Majesty, King
George V approved the Nigerian Protectorate
Order-in-Council in November, 1913. It was this royal
order that gave official backing to Lord Fredrick Lugard
to proclaim the amalgamation of the Northern and
Southern Protectorates to form Nigeria on the 1st of
January, 1914. The numerous tribes were not offered
opportunities to discuss their future. Such discussions
would have enabled the various tribes to agree on
safeguards and standards by which they would co-exist.
This dialogue would have also helped to protect the
rights and privileges of minority tribes. This faulty
foundation laid by the British colonists went on to fuel
the culture of tribalism in Nigeria. As part of efforts
to protect tribal interests, it soon became un-Nigerian
to accuse or indict a fellow tribesman for corruption.
Top government officials in the executive, legislature,
judiciary, armed forces, and police have since then been
protecting their kinsmen or associates involved in
corruption. Today, the roots of corruption have spread
so wide and deep that uprooting it has become very
difficult. This best explains why despite all the
efforts of CCB, EFCC, and ICPC; corruption has not still
abated.
We shouldn’t have waited for Hillary Clinton to come and
remind us that a nation suffering from poor political
leadership can neither fight corruption nor achieve the
fundamental goals of government. It should therefore not
surprise anyone that Nigeria has not been able to
achieve much almost fifty years after gaining political
independence from Britain. Instead of addressing the
causes of poor leadership, our leaders have resorted to
relying on western economic theories to lead the nation
out of the woods. As a matter of fact, Nigerian leaders
need more than sound economic theories to succeed. For
decades now, Nigerian masses have been suffering because
of the refusal of the country’s leaders, economic
advisers, and fiscal policy formulators to recognise the
important place of common sense in nation building. As a
result of this, they have been seeing the woods for the
trees. The non-application of the wisdom of common sense
in leadership can create
big gullies- deep enough to swallow the whole essence of
government.
In Nigeria; the essence of government would be defeated
if fiscal policies are developed and deployed without
minding the short term effects on the larger society,
which is made up of mostly very poor people. While there
is absolutely nothing wrong with implementing sound
economic theories, there are however visible traces of
deep ignorance on the part of our leaders concerning the
nature and limitations of man-made ideas. The
realisation of this would have made them to appreciate
the fact that no one single economic idea is perfect.
The present global economic meltdown is an example of
the failure of trusted economic theories. President
Yar’Adua must therefore not rely on the wisdom of his
advisers. He should always put the opinions of his
advisers through the heat of common sense.
In theory, fuel subsidy is socialist in nature and would
therefore not support a capitalist economic culture.
Even with the collapse of socialism, it is believed that
over 3 billion people on the face of the earth are
enjoying fuel subsidy. Why? Many nations do not have
influence over the price of crude oil in the
international market. It is therefore assumed that
allowing the price of crude oil in the international
market to determine local price of fuel may end up
breaking the already weak platform on which poor people
survive. Despite this popular acknowledgement, the
percentage of subsidy defers from country to country. In
most cases, the amount of subsidy is influenced by
factors such as economy, politics, culture, and even
religion. All of these explain why the price of fuel is
not uniform all over the world. Every country fixes the
price of fuel in line with the fiscal policies of
government. It would definitely shock President Yar’Adua,
his
team of economic advisers, and fiscal policy formulators
in the CBN to learn that while Nigeria is warming up to
remove fuel subsidy in November, the Indonesian
legislature has increased fuel subsidy from RP58.98
trillion to RP68.73 trillion in the 2010 budget. It has
however asked the executive arm to design fiscal
policies that would make the poor benefit more from the
subsidy. To underscore the importance many governments
attach to the interests of the poor, India has special
fuel subsidy plan for tri-cycle operators. Just like
motorcycles have turned out in Nigeria, tri-cycle is a
popular means of transportation among India’s low income
earners.
No doubt, a number of countries have at one time or the
other removed subsidy on fuel. While some had done it in
phases, others had carried it out at once. One very
important point to note here is that, no country has
ever removed fuel subsidy while her socio-economic
framework is as weak as that of the present day Nigeria.
The fundamental argument emerging from this opinion is
that Nigeria’s socio-economic infrastructure is not
strong enough to bear the consequences that would follow
the removal of fuel subsidy.
Our leaders and fiscal policy formulators must not
forget the fact that over 90% of the Nigerian adult
population is living below poverty line. They should
realise that whoever that is unable to create wealth
either by reasons of unemployment or inadequate wages is
poor. That is to say every adult Nigerian that earns
less than N6,500 daily is poor. The reason behind this
opinion is the fact that an average Nigerian family of
five persons (husband, wife, and three
children/relations) will need about N3,000 daily (N200 x
3 meals x 5 persons) to be able to afford decent meals.
They would also need about N1,000 (N200 x 5 persons) for
transport expenses, and another N1,000 (N200 x 5
persons) for miscellaneous expenses. Wealth comprises of
physical properties and surplus cash after taking care
of one’s basic needs. In healthy societies, even the
least paid worker is able to have savings (wealth) at
the end of every month. Therefore, Nigerian workers
should
be able to save- create a minimum wealth of N1,500
daily. With this arrangement, the issues of house rents,
medical, academic, and socio-cultural expenses would not
turn out to be burdens on Nigerians workers again. But
the present day reality is shocking. The bulk of
Nigerians- civil servants, technicians, labourers,
subsistent farmers, traders, artisans, and vendors earn
less than N600 daily. With this brief, we can now
appreciate why the standard of living of the average
Nigerian worker is low.
World Bank documents states that low standard of living
sustains poverty. There is no denying the fact that
poverty is a major contributing factor to the rising
cases of illnesses among Nigerians. The poor health of
most Nigerians can be rightly traced to hunger, severe
malnutrition, and poor sanitation. For obvious reasons,
most Nigerians are too concerned about how to survive
the biting effects of poverty. As a result, very little
or no attention at all is given to nutrition and
sanitation. This already bad situation is made worst by
two fundamental problems. Most houses in Nigeria’s rural
and urban areas do not have decent toilet facilities.
The few that have them do not have water. We cannot talk
of sanitation without water. Unfortunately, more than
80% of Nigerians do not have access to safe water.
Added to this, there has been on a steady rise in
poverty among Nigerians in the last twenty years. Among
the factors responsible for this are failed political
leadership, corruption, obsolete educational curriculum,
poor electricity infrastructure, bad roads,
non-availability of credit facilities, unfriendly tax
regimes, neglect of the agricultural sector, and the
promotion of a mono-economy. Nigeria is no longer a
preferred destination for investors. Within the last
fifteen years, most industries have closed shop and
relocated to neighbouring countries due to the high cost
of doing business. In the process, millions of jobs were
lost. The nation’s huge population is therefore forced
to rely on the few job opportunities in government, oil
companies, and financial sector. Perhaps, this will help
explain why Nigerians now see politics as investment
portfolios. This development has placed massive pressure
on the machinery of governance. The desire by
politicians to make enormous profit from public office
is greatly responsible for the failure of political
leadership in the country. Wherever you go to in Nigeria
today, the effects of failed political leadership can be
seen standing naked in the market place. Corruption,
unemployment, poverty, hunger, disease, frustration,
anger, and crime are almost becoming abnormal in
Nigeria. Sensing that the masses have refused to be
fooled, government has appropriated huge percentage of
national budget to buy guns and bombs for the police and
armed forces. Instead of improving the conditions of
existing ones, government is busy building new prison
facilities across the country to hold those that will
dare it. Sooner or later, more hangmen would be employed
to execute condemned prisoners- most of whom are
unemployed, poor, hungry, and open to the forces of
evils. From all indications, the Nigerian federal
government is close to declaring a senseless war against
its poor and down trodden citizens.
When Queensland State in Australia removed fuel subsidy,
the citizens protested vehemently. They argued that the
removal of fuel subsidy will make their state become the
most expensive in the country. No doubt, the planned
removal of fuel subsidy in November will pitch the
federal government against the already disenchanted
Nigerian masses. It is very hard to explain where
President Musa Yar’Adua is finding the courage to
display blithe disregard for the suffering Nigerian
masses.
As indicated by the minister of finance, Dr. Mansur
Mukhtar; the removal of fuel subsidy is mainly for the
economic benefits of the nation. Like it is in every
country that is subsidising fuel, government loses huge
resources that could have been channelled towards
physical and human development projects. Good as
government’s intentions are, many Nigerians are bothered
about why government always chooses to over stretch the
patience of the down trodden masses to strengthen
national economy. Between 2000 and 2007, the price of
petrol jumped about six times. But despite all the talks
about palliative measures and heightened investment in
critical sectors aimed improving public infrastructure,
the masses were short of being called fools. That is the
reason why the federal government may not succeed this
time around. Nigerian masses have brought out the last
straw!
President Yar’Adua, his team of economic advisers, and
fiscal policy formulators in the CBN are reminded of the
naked fact that all the countries that have removed fuel
subsidy first made attempts and achieved certain
fundamental goals. Nigeria should not be different. For
the federal government to earn the justification to
remove fuel subsidy, it must first strengthen the
socio-economic framework of the nation. To do this, it
must reduce corruption to the barest minimum. It is
mostly because of corruption and pressure from importers
of petroleum products that the nation’s four refineries
are dead. Since Nigeria’s socio-economic framework
cannot support the removal of fuel subsidy, the issue of
privatising our refineries should not arise at least for
now. Before considering the removal of fuel subsidy, the
federal government should ensure that the nation’s
refineries are performing at optimum capacity. It is a
huge shame that with a whole of four
refineries, the world’s sixth largest producer of crude
oil still imports 85% of petroleum products to service
domestic needs when we are supposed to be exporting
same.
Before removing fuel subsidy, the federal government
would need to achieve a minimum annual budget
performance of 90% for a period of three years. This
will help strengthen the socio-economic framework of the
nation. With just 50% annual budget performance for ten
years, Nigeria would have been among the first thirty
most industrialised nations in the world by now. With a
90% annual budget performance for three consecutive
years, it is believed that all federal roads would be in
good conditions and the power sector fixed to support
the 7 Points Agenda of the Yar’Adua led administration.
Furthermore, government should assist to revive
collapsed industries and support new ones to commence
business. This will help take care of the problems of
rising unemployment and its attendant nuisances.
Government must also give strong support to the
agricultural sector. Genuine farmers should be granted
access to low interest and long term credit facilities.
Apart
from being a sure source of national revenue, the
agricultural sector has the capacity to generate
millions of jobs.
As important as it is, government should work towards
ensuring uninterrupted academic calendar. More than
that, a new educational curriculum should be developed
to reflect the needs of the 21st century. Emphasis
should be placed on self employment after the completion
of each academic segment e.g. primary, JSS, SSS, OND,
HND, or BA/BSc. The socio-economic framework of the
nation would be strong enough to accommodate the removal
of fuel subsidy after all the issues enumerated above
have been addressed.
It is very clear that the conditions set out for the
federal government to meet before removing fuel subsidy
is very ambitious and capital intensive. This is
basically how many developed nations have had their
socio-economic framework strengthened to help accelerate
government’s holistic developmental agenda. The first
and most important thing for government to do in order
to mobilise enough funds to meet the fuel subsidy
removal baseline is to reduce corruption to the barest
minimum. Through this effort, government is expected to
save so much money. But more than that, the federal
government should negotiate with the federating units
and mobilise funds from the Excess Crude Account.
Nigeria must however need to meet up her OPEC production
quota in order to adequately fund the Excess Crude
Account. This would only be possible if there is genuine
peace in the Niger Delta region. It is necessary to note
that the federal government’s two pronged
approach of armed suppression of agitation and offer of
amnesty to Niger Delta militants without first
addressing the fundamental issues of environmental
degradation and injustice in the sharing of oil and gas
revenue will only secure graveyard peace in the region.
Nigeria cannot continue to survive on the edge of the
precipice for long. This observation is important
because apart from the Niger Delta question; rising
poverty, discontent with bad government policies, and
arrogant display of ill-gotten wealth by government
officials have all become threats to national peace and
security.
It is therefore ridiculous for members of the
president’s economic advisory team and fiscal policy
formulators in the CBN to sit in the comfort of the
air-conditioned offices to assume that the present
socio-economic framework of Nigeria can survive the
removal of fuel subsidy. What they have done is nothing
but overrating the abilities of Nigerian masses to
endure government’s insensitivity. Fuel is a commodity
that both the rich and poor rely on. This is the reason
why President Yar’Adua must not be deceived into
allowing his well-heeled economic advisers and fiscal
policy formulators in the CBN to think for the millions
of the nation’s unemployed citizens, students,
impoverished civil servants, petty traders, subsistent
farmers, artisans, labourers, street hawkers, and water
vendors. Doing so will amount to betrayal of trust. I
challenge the federal government to publish the names of
the president’s economic advisers, fiscal policy
formulators in the CBN, and members of the Presidential
Committee on Deregulation of the Petroleum Downstream
Sector. Most of these persons can afford to buy fuel
even at N200 a litre. The few that may not be able to do
so but in support of the removal of fuel subsidy might
have been either cornered or brainwashed into
submission. It most disheartening that these persons
would not bother to capture the plight of millions of
Nigerian workers that earns less than N600 daily. The
removal fuel subsidy will definitely plunge the masses
deeper into the bottomless pit of poverty.
It is extremely dangerous for a governor or president to
have advisers who are not independent minded. Such
advisers are most likely to make prescriptions that
merely seek to please their principals. Non-independent
minded people do not believe in the efficacy of common
sense. They would readily die for theories developed by
one renowned professor or international institution. Any
governor or president that has such persons as advisers
would surely fail. Before ever implementing the
recommendations of the World Bank, IMF, or other global
financial institutions; our political leaders must
properly analyse all subsisting socio-economic elements.
This is where the application of the wisdom of common
sense becomes very essential. Without the application of
common sense, an adviser would wake up one morning and
suggest to the president that the grumblings of poor
Nigerians are a threat to national security and should
therefore direct the Attorney-General to
ensure that all those caught complaining about poverty
be sent to jail. This is the kind of advice President
Yar’Adua is fed daily with. Unfortunately, he is not
allowed by his aides to see the straw in the hands of
every suffering Nigerian.
Subsidies are really an indirect way of putting money in
the pockets of beneficiaries. It is not waste of money
as many economists would want us to believe. Rather, the
removal of fuel subsidy was merely an option developed
to raise addition funds for government. Most developed
countries still give subsidies to sectors critical to
their national development. For instance, agricultural
subsidies accounts for more than 40% of the total budget
of EU. This has not only helped the agro-allied sector
to grow; it has equally promoted food security in the EU.
Back home in Nigeria, the deregulation of the telecoms
sector helped to put phones in the hands of millions of
Nigerians that wouldn’t have had access with the
monopoly that NITEL enjoyed. Nevertheless, the same
cannot be said of the downstream sector of the petroleum
industry owing to its critical nature. Unlike the
telecoms sector, businesses in the petroleum industry
are strongly tied to the
international market, which is transacted in US Dollar.
Minus the fact that Nigeria does not have influence over
the pricing of crude oil in the international market,
our local currency is too weak against the US Dollar.
Furthermore, Nigerian workers are not paid the US Dollar
equivalent of what their contemporaries earn in
developed countries. This fact alone has rubbished the
bases for government to believe that the income of
average Nigerian workers can withstand the removal of
fuel subsidy. The very wide disparity in the wages of
Nigerian workers and their contemporaries in developed
countries were fuel subsidy was removed should act as
bumps along the road President Yar’Adua is driving. The
president is reminded that there are inherent dangers
associated with leaving the fate of the down trodden
masses to be massaged by international market forces,
which Nigeria does not have any influence over. Only a
reckless leader would afford to do that.
This is the major reason why fuel is still being
subsidised all over the world. The Economist reports
that over half of the world’s population enjoys fuel
subsidies. The level of subsidy varies from country to
country. For instance, the official pump price of a
litre of petrol in Nigeria sells for N65- about US45₵.
However, petrol marketers sell a litre of petrol for as
much N90 in the riverine areas of the Niger Delta region
due to the dearth of major marketers. Venezuela is
reputed to be the nation with the cheapest fuel. There,
a litre of petrol goes for just 4₵. In Britain, a litre
of petrol goes for about $2.77. It is 79₵ in China, 15₵
in Saudi Arabia, 30₵ in Kuwait, 29₵ in Egypt, 16₵ in
Libya, 24₵ in Qatar, and 13₵ in Iran. Compare this to
the $1.15 in the United States, $2.62 in Germany, and
$2.69 in France. The percentage of subsidy is mostly
influenced by government’s evaluation of the country’s
socio-economic framework.
Perhaps, I should also remind President Yar’Adua that as
the nation approaches election year, a lot of political
forces will come to play. Some opponents would no doubt
infiltrate weak links within his colony of advisers and
aides to achieve political gains. This is one strong
reason why he must not swallow all suggestions line,
hook, and sinker. Every advice should be put through the
test of common sense before being deployed. One of such
prescription is the removal of fuel subsidy. It was
sickening to hear the Minister of Finance, Dr. Mansur
Mukhtar argue that the low price of fuel in the country
has encouraged the smuggling of the commodity across the
nation’s border. While I agree that cross-border
smuggling of petroleum products contributes to cases of,
I am at loss as to why the Nigerian masses should be
punished- held responsible for the ineffectiveness of
the Customs and security agencies at the nation’s
borders. It has never been heard
that the president has punished or reprimanded the
Comptroller General of Customs, Inspector General of
Police, Chief of Army Staff, Chief of Naval Staff, or
Chief of Air Staff following the revelation by the
Minister of Finance. Is this the rule of law President
Yar’Adua and Minister of Justice and Attorney General of
the federation, Mike Aaondoakaa have been flaunting all
over? How can a serving minister make such a grave
indictment and yet nothing happens. The rule of law
should be dismissed as a farce. Were it to be in
developed societies, this high level indictment of the
Customs and security agencies in the nation’s border
posts by the Minister of Finance is enough for
government officials to resign.
The patience of Nigerian masses has run out. It was
mainly for the fear of military intervention and
possible disintegration that Nigerians ignored the
charade that was the 2007 presidential elections. The
planned removal of fuel subsidy will be a different ball
game all together. Nigerians are already disappointed
with government. Apart from the fact that corruption is
still thriving, Nigerian roads are the worst in the
whole of Africa. The power sector has become a source of
shame and embarrassment to Nigerians. Current power
situation cannot support any meaningful economic
development. Businesses are closing daily and
unemployment figures reaching to high heavens. The
educational sector has completely collapsed, while basic
health care services are accessed only by the rich.
Crime rate has reached an alarming state despite all the
guns and armoured personnel carriers provided for the
police.
Just as the federal government cannot end the problems
of agitations in the Niger Delta region by merely
granting amnesty to militants; it will also not be able
to reduce crime by just arming the police with very
sophisticated weapons. It was shameful to hear the
Minister of Police Affairs proudly announce last week
that the federal executive council has approved the
purchase of a hi-tech helicopter to help the police
fight criminals. Instead of wasting scarce resources on
the purchase of helicopters and other similar utilities,
government should start thinking of setting up
programmes that would expand the capacity of the
nation’s economy to support the resuscitation of
collapsed industries and encourage others to establish
new ones. When unemployment is reduced, crime rate too
will naturally fall.
More than anything; the federal government should not
allow forces in the international oil market to destroy
the very essence of government. Perhaps, I should build
a monument here to highlight the fact that many Nigerian
workers spend over 50% of their salaries on
transportation alone. This has not only affected the
quality of their meals; the health and educational needs
of their children and dependants are relegated to the
background. This is the platform for the growing of
illiteracy, poverty, and crime in our society.
The purchasing power of citizens is determined by their
take home pay. When the price of crude oil goes up in
the international market in a deregulated economy; crude
oil earnings jump. In the same vein, the pump price of
petrol and other related products too increases while
the take home pay of workers remains stagnant. This
development no doubt reduces the purchasing power of
citizens. Subsidies are therefore given whenever the
fiscal instruments of deregulation exceed pre set bench
mark. Ordinarily, bench marks are set with the nation’s
socio-economic framework in mind. That is to say,
deregulation has a human face. It should not be
different in Nigeria. Most importantly; in all developed
countries where fuel subsidy has been removed, the
salary of an average worker is able to provide for his
or her family’s feeding, transportation, health care,
and social needs. They are even able to make savings.
The BIG question is: How many Nigerians earn
monthly salaries that can sustain them and their
families for up to one week, not to talk of making
savings? I’m not sure if it’s up to three million.
Government’s position on the removal of fuel subsidy can
be conveniently related to the on going conflict between
ASUU and the federal government. Most persons supporting
the federal government’s position are those who either
have their children in foreign universities or are
fortunate to have their wards go through university. On
the other hand, the bulk of those pushing for the
removal of petrol subsidy can afford to buy petrol for
even N500 a litre. They do not bother even if 100m poor
Nigerians can’t afford it.
Nigeria belongs to both the poor and rich. For a very
long time now, the poor have lost their stake in the
Nigerian Project. The nation’s political culture is such
that the masses do not have any means of holding their
leaders accountable. The electoral law does not make
elected officials respect the feelings of voters. As it
stands now, fuel subsidy is the only benefit Nigerian
masses enjoy. Unfortunately, the government has
commenced plans to withdraw this single benefit. This is
the main reason why both the Nigeria Labour Congress
(NLC) and Trade Union Congress (TUC) have vowed to
resist any move by the federal government to remove fuel
subsidy. The organized labour believes strongly that the
withdrawal of fuel subsidy will further condemn Nigerian
workers to the abyss of poverty. With all amount of
responsibility, I wish to note that with fuel subsidy,
government is indirectly putting money in the hands of
poor Nigerians. As ways of raising
revenue, government should leave the poor and look the
way of wealthy citizens. Government should impose very
heavy taxes on luxury cars and private mansions. More
than that, the sources of wealth of citizens must be
verified. There should be legislations to make citizens
explain the sources of money used in buying cars,
building houses, and setting up businesses. Apart from
narrowing the opportunities for corrupt practices,
government will through these fiscal policies raise
enough money to meet the needs of society.
Frankly, fuel subsidy is the least of Nigeria’s
problems. Our major problems are corruption, tribalism,
the failure of rule of law, and poor political
leadership. I can bet the president that even if
government succeeds in going against the wishes of the
Nigerian masses to remove fuel subsidy; the forces of
corruption, tribalism, injustice, and poor political
leadership would in no distant time swallow whatever
gains that would be made. This does not make any sense.
Government is therefore encouraged to allow poor
Nigerian masses hold onto the single benefit of fuel
subsidy pending when the nation’s socio-economic
framework would be strong enough to support
deregulation. This is the truth and nothing but the
whole truth. So help me God!
KALI GWEGWE
2 Greenvilla-Custom Link Road,
Biogbolo-Epie, Yenagoa,
Bayelsa State.
0806 407 4810
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