Subsidy: An End To National Emergencies?

  • Written by  Anthony Amadi
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Subsidy: An End To National Emergencies?

Organised labour in Nigeria came under pressure to declare a nationwide demonstration following the withdrawal of subsidy on refined petroleum products in the country which President Muhammadu Buhari and his henchmen unilaterally announced and foisted on the masses recently.


But even before now, opinions in some quarters had been that deregulation of the downstream petroleum sector was necessary and inevitable. Thus, government was expected to sooner or later, discard its free-fuel obligations to consumers in the country.

When in 2011, the Goodluck Jonathan administration however attempted to withdraw the subsidy, the move was met with very strong opposition from labour, civil society groups, lawyers, political opponents and the public, including hoodlums who attempted to hijack the protests to inflict crimes and mayhem on the public. Ironically, most of the protesters of yesterday are the proponents and protagonists of the intrigue of today to shock Nigerians with a total removal of existing subsidies on petroleum products without any inkling. 

With the announcement of the subsidy removal some days ago therefore, only the expected had just come to pass, albeit to the discomfort of the yawning masses that barely had enough to gulp. This sector, one can guess, should be motivated and highly agitated to partner with the organised labour for a possible protest against what could be termed a presidential “fiat”.

But, while the Trade Union Congress of Nigeria (TUC) and the Nigeria Labour Congress (NLC) are fretting over a possible response to the action of the federal government, it is reported that groups like the National Union of Petroleum and Natural Gas workers (NUPENG) and its senior counterpart, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) are flexing their muscles in support of the federal government's action. These and their allies are already allegedly dissociating themselves from any plots to resist the imposition.

But protest or no protest, the subsidy poke has been a running temptation, always stirring up national emergencies that have largely set the nation's boat rocking. It's a shame that in a country with no social welfare schemes of substance for the masses to benefit from, subsidy on fuel consumption became a source of huge concern for a federal government with trillions to toy with and steal from. From absolute or maximum subsidy, Nigeria passed through several partial subsidy removals and has now come to settle at zero subsidy implementation. The question is, with no more subsidy issues for the federal government to grumble on, what next will they seek to deny the masses; what next would they stir national emergencies on?

Let's accept that the Nigerian politician considers keeping the national treasury buoyant, but it cannot be denied that he largely believes in national emergencies to divert the attention of the masses from several of his nefarious acts. Certainly the subsidy was one sure way of achieving that. By creating panic in the system, hiking transport fares, raising school fees and cost of food items, and driving almost everyone insane, the masses grapple with regaining their balance while the ever-dubious politicians settle down to organise their loot. No one else actually causes the scarcity and subsidy crisis but the political leaders who have turned themselves into merchants doing fast business for quick gains with Nigeria and Nigerians. But ask him where he is plowing back the proceeds, and your guess is as good as mine.

According to the TUC, corruption and not fuel subsidy is the single most important factor militating against the development of Nigeria.

 Therefore, any plan to transform Nigeria without a clear demonstrable plan and political will to reduce corruption by a considerable percentage in the first instance will only end up achieving the opposite – increasing the suffering of the ordinary people as it were, who bear the burden of corruption and inefficiency, while enhancing the wings of the dubious ones among the lot.

The TUC goes further to ponder over subsidy removal in a corrupt Nigeria: “Away from the issue of corruption, the next concern that we have is that governments over the years seem to be only interested in the removal of oil subsidy and not the total transformation of the downstream sector for the economic development of Nigeria. This if allowed to happen will be catastrophic. We expect the government to carry out a sincere, detailed and comprehensive review of the downstream sector with a view to finding and implementing lasting solutions to the industry's problems. The solution will include legislating on the framework for the sustainable development of the sector


“We restate our rejection of the removal of subsidy and look forward to an emergency National Executive Council (NEC) meeting of the Trade union Congress of Nigeria on this and other burning issues such as the continued disobedience of court order on  the 45 per cent hike in electricity tariff. We also appeal to the Nigeria Labour Congress (NLC) to also summon its NEC meeting as this is clearly a national emergency.”

The national emergencies of yesterday have only been replicated today because there was a platform for it. If the subsidy had disappeared with the past, as is now the case, it would really not have been revisited today. And since this is no partial but complete removal, one could start considering the country safer as there would be no more platforms for national emergencies as a result of subsidy issues. Premised on this, one would consider aligning with the schools of thought that want the total withdrawal of subsidy, as this is one sure way of eliminating, at least, one aspect of unnecessary national emergencies.

The underhand manner of the withdrawal of the subsidy, according to the TUC, is one major source of irritation. “We are tempted by the underhanded manner the purported fuel subsidy was removed to believe that government deliberately created a huge supply gap and subjected Nigerians to months of buying petroleum products at outrageous prices so as to justify the removal of fuel subsidy as a solution to the current fuel price debacle. Besides, we drew the attention of government to the fact that there is no provision for petroleum subsidy in the 2016 budget and sought to know the plan of government, and we were variously assured by government that there was no plan for deregulation or removal of fuel subsidy.

“We want to state very clearly that every country in the world has one form of subsidy or the other.

 So the issue is not about subsidy but how it is managed, the costs and benefits of the subsidy to the country. Moreover a good percentage of the figures being bandied around as cost of fuel subsidy is actually the cost of corruption in the fuel subsidy management process. The removal of subsidy is therefore more about transferring the burden of the payment for the corruption in the subsidy scheme from the government to the ordinary people.”

The non-passage of the Petroleum Industry Bill (PIB) is said to have cost the country about $80billion in lost investments. Even the 8th Senate on April 26th 2016 suspended debate on the new PIB as most senators kicked against its second reading on the grounds that copies of the bill were not made available to them.

Without a legal framework for deregulation and liberalisation of the downstream sector, how will anyone believe that the political class, and indeed government, is serious about the downstream sector reforms and indeed the reforms in the nation's oil and gas sector?

The main concern with the government model is that much of the funds that will be freed from the removal of fuel subsidy will disappear through corruption and inefficiency. The fact remains that corruption in Nigeria is a very huge industry and has crowded out investments in the real sector. Our manufacturing industry is comatose due to corruption and the inability of the government to fix the power sector problems.

But rather than have the subsidy issue continuously nag against the smooth sail of the nation, wouldn't it be breath-saving to accept this terminal point and let these national emergencies come to an end? This is the question all well-meaning Nigerians must ponder over even while they need to wake up and hold their innately corrupt political leaders accountable for their failure to deliver on democracy dividends. 

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