SUBSIDY, A BIG ISSUE in Nigeria, and the hike in electricity tariff, again, are on the burner. Within three months – June to September 1, 2020 – despite the grave upset Covid-19 has caused, globally, to lives and economies, petrol prices in oil-rich Nigeria, have risen astronomically. The latest been N160 pump price, effective September 1, 2020. Petrol subsidy, in particular, for decades, has been stormy and contentious. Petrol and electricity affect the economic and social well-being of citizens in the country. Who has been benefiting from the SUBSIDY regime? Who has been bearing the brunt?
Economists argue that continued retention of petrol subsidy would hinder economic growth and infrastructural development, and are unsustainable. They also argue that players in the subsidy regime have been scandalously fraudulent. But impoverished and well-meaning Nigerians disagree. They argue that petrol subsidy is the way to go. Nigeria is home to crude oil. There are three huge refineries in the country. If fully operational and produce to capacity, the citizens deserve subsidy on their prime economic product – petroleum product, produced in the country and exported to other countries.
Governments over the years have failed to fix Nigerian refineries, or to build more refineries, so as to produce refined petroleum products to full capacity, and serve the interest of its citizens. Regime after regime – military and civilians, deserved attention was never given to building more refineries, or resuscitating the existing ones to perform to full capacity and make petroleum products available to Nigerians.
The refineries have, however, been comatose. They have become white-elephant projects. Government after government, while in office, set an agenda to fix the refineries; even to build more refineries in the country. Billions of Naira have gone to the drains fixing the refineries. Yet the refineries have refused to take-off, not to talk of working. Each government, repeatedly, sets target and timelines for the refineries to come on stream, produce petroleum products to full capacity, and meet the consumption needs of Nigerians.
Nigerian governments, after governments, embarked on the rigmarole to fix the refineries. The efforts ended in deadlock. The questions have been – why can’t governments fix the refineries? Why can’t governments build more refineries? What has happened to Billions of Naira budgeted and spent on fixing the refineries? More questions, no answers. Allegations of embezzlement of funds meant for fixing the refineries persist. Probes have been instituted on the failed efforts to get the refineries working. No results from the probes. The problem – failed and untrusted leadership have been the bane for several years. Not Nigerians.
So, who should bear the brunt of years of failed leadership to fix the refineries, or build more refineries, and make fuel available, at resealable and affordable price, to Nigerians and for economic growth? Nigerian leaders, rather than tackle the problems headlong, took economic suicidal shortcut. Began to provide petroleum products for its industries, businesses, commercial activities, homes and for social activities for the citizens through importation from other countries, finished refined petrol.
Countries, small and big – industrialized and developing – that are not the size of Nigeria’s economy, technology, expertise and population; joined the blazing trail of purchasing crude oil from Nigeria for refining, then export the refined products back to Nigeria for consumption. Leadership – failed leadership. Inefficient, unfocused, clueless leadership deficit – from Nigeria’s recycled leaders.
FACETS OF BIG ISSUES, removal of petrol subside and hike in electricity tariff, at the same time. There is no difference in the narratives and arguments for-and-against the recent increase in electricity tariff in the country. Nigeria, as a nation, is in darkness. In quest for light for decades, due to failure of governments and leadership to tackle the issue of electricity supply to Nigerian consumers.
Electricity, eleven letters, reflects three images – power, progress and authority. Humanity’s almost unimaginable progress hinged on electricity – science, medicine, technology and the arts. Electricity has made the world, a global village. Electricity is the highways of the world. Without electricity, the wheels of industries will not turn. Advancements in sciences and technology, and the arts, would come to naught, without electricity.
Nothing has total control of human life, like light. God’s create work on earth, began with the command that there should be light. And there was light. Progress results when darkness is displaced by light. In the twenty first centuries, Nigeria and its citizens are plagued with darkness – still struggling to provide electricity for its teaming population estimated at 200 million people, for industries, businesses and commercial activities. Yet, prides itself as Africa’s giant and leading economy.
After years of neglect, advocates of privatization, argued that privatizing the energy sector would stimulate the sector’s improvement and growth in power generation and supply in the country. September 2013, former President Goodluck Jonathan, commenced government divestment in the energy sector. From NEPA to PHCN, eventually, the emergence of 11 Electricity Distribution Companies, DISCOs; six Generating Companies, GENCOs; one Transmission Company. The DISCOs are responsible for electricity distribution to region and states in the country.
Yet, Nigeria is still in darkness. Unempirical arguments by some experts, has been that deregulating the sector and increase in tariff will improve the supply of electricity to the publics. Public hostility has greeted the performance of the DISCOs in supplying electricity to Nigerian consumers. The vexed issue has been incessant tariff increase and over-billing, resulting from “Estimated Billing” regime, a fallout from non-provision of meters to electricity consumers in the country. Estimated Billing regime to unmetered customers have been described as “huge fraud, extortion and fleecing” the consumers by DISCOs.
CHANGE of Gear by President Buhari’s government, on deregulation of petrol. President Buhari rode to power on unprecedented goodwill of Nigerians, on the mantra of CHANGE, on the platform of All Progressive Congress, APC. Buhari promised Nigerians – restructuring, rebuilding the economy, fighting corruption, ending insurgency and other forms of criminality in record time, ending importation of petrol by resuscitating the refineries, reduce petrol pump price to the barest minimum, assuage the sufferings of Nigerians by improving their living conditions.
As opposition party, before his election, in 2015, Buhari and his party, APC, vehemently, criticized former President Jonathan’s attempts to deregulate the petroleum sector. Nigerians, on January 1, 2012, woke up to sudden removal of petrol subsidy by the government. Ngozi Okonjo-Iweala, Minister of Finance and Coordinator of the Economy, championed the subsidy removal. Fuel price rose from N65 per liter to N141 per liter.
Jonathan’s government said it could no longer sustained the economic drain to the nation’s resources through subsidizing petrol. It also identified inherent massive corruption in the subsidy regime over the years. There was no prior notice for the subsidy removal, and the citizens were caught unawares.
Government’s argument, then, was that the removal of the huge amount spent in subsiding petrol would free up funds for other public services investments – in health, infrastructure, education, road and rail projects, among others. The accruing funds from the subsidy removal, would impact on the economy and benefit Nigerians.
Government added that the utmost beneficiaries of the subsidy regime were not the ordinary poor citizens, but the wealthy – who consume more fuel than the poor. As well as, the wholesalers who made profit selling subsidized fuel to other countries. Government’s argument seems very convincing. But Nigerians were not prepared to toe that line of thought. The reason was simple.
They could no longer trust their leaders. Nigerians favoured the subsidy regime. They argued that the only few benefits they enjoyed from past and present governments, that were inimically corrupt and inefficient, were petroleum and electricity subsidies. Removal of the subsidy on petrol was “insensitive and unacceptable to the citizens”. They vowed to vent every atom of their energy to resist the removal of petrol subsidy.
Jonathan’s government did not take the threats from spectrum of the society – labour, civil society, student unions and different associations, to resist the removal of petroleum subsidy seriously. The effects of the subsidy removal were already reflecting on cost of foods and other commodities in the markets. Nigerians would take none of the painful experience ahead of them. They believe the government was corrupt and would not trust the leaders to spend the funds on other public services it claimed would replace the fuel subsidy.
Simultaneously, on January 2, demonstrations against the removal of petrol subsidy began in Lagos, Kano and Abuja. At strategic points in the cities, demonstrators gathered. They demanded that government should reinstate petrol subsidy. January 6, the protests spread to several major cities in the country, and economic activities were gradually grounding – especially, in Lagos, Ibadan and Kano.
Faceless, distinguished individuals – politicians and clergymen of various backgrounds, sponsored the protest. Daily meal and other items were supplied to the demonstrators – who were on the streets morning till night. Jonathan’s government intervened when the situation was deteriorating to disperse the protesters.
January 5, Nigerian Police were reported to have beaten up protesters. There were contradictory reports that some policemen even joined the protests. To worsen the situation, Nigerian Labour Congress, NLC and Nigerian Trade Union Congress, TUC – two largest umbrella body of trade unions in Nigeria, called for national strike on January 9. Nigerian Medical Association, NMA and Nigerian Bar Association, NMA, planned to join the protests. Other unions, also threatened to join the protest.
Nigerian government became awfully worried and concerned about the spread of the protests. The cumulative effects of the protests, if allowed to continue, could cause extensive damage to the economy. January 16, President Jonathan bowed to pressure. Partially, he reinstated the fuel subsidy. From N141 hike, petrol price dropped to N97 per liter; against N65 before the hike. This was considered reasonable, and normalcy returned to the country, and business and commercial activities picked up, once again.
NIGERIA. may be on the move again, on the issue of removal of petrol subsidy and hike of electricity tariff, simultaneously. Buhari’s government has restated its position on issues. They are irreversible. Momentum is gathering for Nigerians and various associations to resist the removal of petrol subsidy and reversal of hike in electricity tariff. The outcome would be anybody’s guess.