Monday, January 16, 2012

The Clash of Blind Support vs Courage

Blind support has destroyed many political leaders in the past. Sometimes, these support come in the form of ethnic, religious, or political patronage. I Thank God that President Goodluck Jonathan has finally realised this potent fact and decided to listen to the masses by exhibiting the rare courage of a true democrat by shifting grounds with regards the pricing of petrol. Unlike many may think, listening to the voice of reason does not in any way portray weakness. It rather gives beauty and strength to the political culture of democracy.

Right from the beginning when government announced the official withdrawal of fuel subsidy, I had come out to say, those who are appauding the decision do not love President Jonathan. I was convinced that this was not how democratic political leadership should be. There must be a linkage between vision and the people. The reason for my opinion is this: Democracy is centered around the people. Everything must therefore be done to protect the interests of the masses, most of whom cannot afford just one decent meal a day. The bitter truth is that the socio-economic framework of Nigeria is still too weak to sustain a further weakening of the purchasing power of the majority of citizens. The upward adjustment in the pump price of petrol by over 100% unarguably distorted the expenditure calculations of every Nigerian family, leaving the poor among us to hang on to gloom for survival.

According to statistics announced by the CBN governor, Mallam Lamido Sanusi, over 70% of Nigerians are living below poverty line. It meant that these Nigerians cannnot rely on their legitimate incomes to provide food, shelter, education, transport, and health care for their families. Apart from the problems of poor socio-economic infrastructure, the poverty situation in the country has been made worse by the high unemployment figures which is put at about 25%. Those supporting the withdrawal of fuel subsidy are not bothered about these facts. In most cases, they were simply carried away by government’s promises of what it intends to do with the money saved from the exercise. Others were touched by the opinion that it will help curb corruption. There is nothing wrong in all of these excepting the fact that they all failed to realise the consequences of ignoring the the prescription of the constituition in fighting corruption. Without doubt, the constitution is very clear about how to fight and punish corruption. It was therefore absurd for some persons, including Okonjo-Iweala and Lamido Sanusi to claim that members of the cabal are too powerful and cannot be tamed by the laws of the country. This is a shame. It was based on their wrong conviction that they advised the president to abandon the constitution and use the removal of subsidy to “punish” fuel importers that usually steal our common wealth in the name of fuel subsidy. This writer is glad that President Jonathan has identified this big lie and ordered the EFCC to investigate all fuel subsidy payments. This is the best way to deal with corruption- not using the masses as cannon-fodders.

My other argument was that it is government’s duty to keep our refineries working in order to avoid the importation of petroleoum products. Therefore, if it cannot do that, it should accept the burden of paying the subsidies and stop transferring the burden on the poor Nigerian masses. I had also argued that just as there are many ways to kill a rat, there are equally many ways to remove fuel subsidy. Of all the options, I had suggested that government pick that which will protect the interests of the 70% that are living below poverty line. Unfortunately, the option prescribes by Okonjo-Iweala and Lamido Sanusi was designed in line with the World Bank and IMF dictate. As in most instances with World Bank and IMF-prescribed fiscal policies, the 1st January announcement did not take into consideration the fact that over 100m Nigerians are waist deep inside the mud of poverty. It was for this reason I suggested that government choose a pro-masses option to remove fuel subsidy by ending the importation of fuel. No doubt, we will have no need to import petrol and pay subsidies if our refineries are working at full capacity. Nigerians should ignore the argument in some government quarters that our four existing refineries cannot produce to meet local consumption. This is a lie sponsored by the so-called cabal to mislead both government and the citizens of this country to validate the reason to continue importing and collecting subsidy for fuel imports.

While I hail President Jonathan for the exhibiting the courage of a true democrat, the Labour and civil society is encouraged to accept government’s offer with both hands. For one, those who stole our common wealth in the name of fuel subsidy will be brought to book. On the other hand, government should stop painting the shameful picture that it is incapable of stopping the cabal from looting our national treasury. All those involved in sharp practices, not minding their status in society should be made to face the law. This is one way government can win the confidence of Nigerians. No government; despite the genuine intentions of the leaders would succeed without the support of the people. I do not also want to believe that there are no credible Nigerians to keep the cabals at bay in handling the subsidy scheme while our refineries are being rehabilitated.

To all those who give blind support to political leaders based on ethnic, religious, or political reasons; I want to say the time has come for change. In shifting grounds, the president has practically confirmed the fact that the interests of masses are important to him. His aides and all those who claim to love him should not reason otherwise. In forming our opinions, let us always keep in mind our brothers and sisters that are deep inside the dirty mud of poverty. This is one way we can be our brothers’ keepers.

But above all, I want reiterate that many of President Jonathan’s aides are not of any help to him. Some of them are working to destroy him from inside. Some of these persons have sympathy for Boko Haram. Others simply give advises or prescribe fiscal policies that will pitch the masses against him. This is the reason why he must be careful.

Thursday, January 5, 2012

Fuel Subsidy: Reasons behind its removal

It is important that we understand why Government has decided to remove fuel subsidy.
Reason No. 1:
Government do not have the capacity to generate enough revenue to fund national budget. This is due to the fact that our economic experts and fiscal policy formulators are dry of ideas. If not so, there are many other ways to generate revenue without hurting the masses. The removal of fuel subsidy is killing the masses. Democratic governance is not all about Naira and Kobo. Let us think of better ways to fund national budget.

In this regard, government should reduce the size of governance, cut the salaries and allowances of elected and political office holders by 50%, introduce a Wealth Verification legislation, and tax the wealthy. Visit my blog for more details on this issue.

Reason No. 2:
Government is unable to curb corruption in the oil sector. A minority but powerful cabal has taken over the NNPC and all its subsidiaries. This cabal actually decides the fate of Nigeria, since we depend on oil for national development. The cabal is so powerful that no one dares them. They have systematically ruined our refineries so as to promote the fuel-import business where they make billions of naira in illegal deals. Though, government is aware of this, there is no courage to confront them. The safest thing it could do was to remove subsidy. In doing this, government is using the masses as cannon fodders to fight corruption in the NNPC. This is wrong. We cannot afford to sacrifice the poor suffering masses to fight the cabal. We are all aware of the pains Nigerian masses are suffering owing to the jump in the prices of goods and services.

The palliatives as announced by government will not do much. This is because, Nigeria is still largely rural. This will make it impossible for the palliatives to get across. Take for instance the issue of 1,600 diesel powered buses that will be distributed across the country. Apart from the fact that many rural areas do not have roads that these buses will ply, who will regulate the fares that the transporters will charge since the loans will be paid back in five years time?

It is most painful that while other nations are designing fiscal policies that will strengthen the purchasing power of citizens, we are doing the direct opposite here in Nigeria.

The governor of the CBN, Lamido Sanusi said 70% of Nigerians are living below poverty line. Ironically, this same Sanusi believes that these poor Nigerians can withstand a further weakening of their purchasing power. My opinion is that Nigeria's socio-economic framework is still too weak to withstand any devaluation of the pocket-worth of the 70% poor Nigerians. Government should first fix the power problem, make our four refineries operate at optimum capacities, reduce corruption, and make our public infrastructures functional to stimulate economic growth. This will reduce poverty and create new jobs that will be sustainable.

I also do not agree that it is only the rich that benefit from fuel subsidy. We do not need to tell lies in order to make our argument look attractive. Based on the meager resources at their disposal, it is the poor that actually benefit more from the fuel subsidy. Now that it has been removed, we can appreciate the wisdom in my argument.