THE IMPARTIAL OBSERVER
Matters of the Moment
Goodluck’s Bad Luck
HANK ESO
Saturday
14 January 2012
Nigerians are finally angry …
The ongoing demonstrations will run its
course and the people will prevail in the end. President Jonathan should
immediately use an Executive Order to peg the price of petrol at N65, while
letting the subsidy withdrawal stand.
The
two most critical national security issues confronting President Goodluck
Jonathan of Nigeria fall well within the realm of game and decision theory. In
both instances, as we are witnessing, President Jonathan has made and seems
bound to make further decisions, with great uncertainty of the outcome.
Questions are already being asked: Is he being ill-advised or incapable of
mustering the will to act?
Perhaps,
there had to be a tipping point for Nigeria, and it might have arrived with the
most ill-advised, ill-informed and ill-conceived decision on how to withdraw the
fuel subsidy in Nigeria. The choice to push this policy at a time when the
greatest concern was the rise in violent terrorism being wreaked on Nigeria by
Boko Haram is rather mind boggling. Rather than rallying around the flag,
Nigerians are at great odds with their leader.
Like many, this pundit supports the removal of the fuel subsidy strictly as a
pragmatic public policy aimed at national interest; but is totally against how
the policy was implemented, without broad and extensive debate, without any
contingency planning and without any recourse for the population, including
mollifying and ameliorative palliatives.
Clearly, there was a fallacious notion that the fuel subsidy could go and
it would be business as usual in Nigeria. The Government was wrong.
Apropos Nigeria’s situation, as a Bob
Marley song goes:
“You
can fool some people sometimes, but you can't fool all the people all the time.”
Policy of a dubious parentage:
Clearly, the
massive and unprecedented opposition to the fuel subsidy removal is an
indication that the president and his advisers were not in tune with the
nation’s mindset and its pulse. Strategically, they failed to fathom possible
people-and-street-power reaction to the withdrawal, more so in the wake of the
Arab Spring protest that has engulfed several illiberal governments.
Had Nigerian policymakers carried out their cause-and effect analysis and
due diligence, they might have tarried or followed the path of Ghana, which also
ended all forms of oil subsidy, but without the protestations.
Policies hardly exist in a vacuum. So whatever policy option the President
Jonathan may elect to pursue regarding Boko Haram and the fuel subsidy removal,
he must bear one fact in mind that there are strident efforts in some quarters
to make Nigeria ungovernable during his watch. Furthermore, perceived government
lies, prevarications, insensitivity to the plight of the people and the awful
timing of the withdrawal has worsened the situation. The bottom line, really, is
that Nigerians not only feel disenfranchised in the face of massive corruption
within governmental circles, but they also no longer trust President Jonathan
and his team of advisers to do what they say or promise. The abrupt end to fuel
subsidy is the snapping point.
Several critical facts led to the present impasse. Justifiable as it is, the
fuel subsidy removal is a policy with a dubious parentage and ownership. Though
the policy affects many national stakeholders, there is no common frame of
reference. This was a policy not
articulated by the President, the National Assembly or the Federal Executive
Council, but by the state Governors, in reaction to the mandatory minimum wage
expenses imposed on them by the Federal Government. Moreover, as if to confirm
its dubious ownership, the 1 January withdrawal, despite its enormity, was not
announced by the President, the Vice President, or the Finance Minister, but
rather through an oblique press release by the
Petroleum
Products Pricing
Regulatory Agency.
Hence, Finance Minister Okonjo-Iweala was right in asserting that the state
governors were in agreement with the Federal Government on the removal of the
fuel subsidy. Yes, the removal was indeed a default policy arising from
the governors’ unrelenting demands. However, what Minister Okonjo-Iweala is yet
to explain to Nigerians, is why the Federal government unilaterally took full
and sole ownership of the policy, its implementation process and responsibility
for the timing. She indeed inherited the fuel subsidy debate and dossier, but if
she was a withdrawal advocate and understood the linkage between development and
security, how come she glossed over the deleterious and unconscionable impact of
the abrupt withdrawal?
First, the entire fuel subsidy calculation has been opaque and amounts to fuzzy
math, thus raising suspicion that there is more than meets the eye. There should
be no secret about the identity of the beneficiaries or contractors who won the
bid to import foreign crude, unless there is something criminal and fraudulent
about the arrangement. Also, Nigerians went on holiday believing that the
removal would not happen before April.
Secondly, government failed to decouple this overarching and
critical domestic policy from the utterances, pressures and policy advocacy on
subsidy removal emanating from institutions such as the U.N., the World Bank and
the IMF. Jeffrey Sachs, a senior
adviser to the U.N. Secretary-General had described the withdrawal as a
“bold and correct policy.” The
Federal Government would only belatedly and after the fact, seek to convince an
already disenfranchised people that the subsidy policy is not externally driven
by the Breton Woods institutions. So much for sovereignty and policymaking!
Thirdly, the Federal Government’s efforts, if any, to
sensitize the national population on the matter and how it would judiciously
spend some N600 billion in savings accruing from the oil subsidy was at best
dismal, and indeed, reactionary and ex
post facto. So too, were the setting up of the Kolade-Belgore Subsidy
Utilization Committee and the Subsidy Reinvestment and Empowerment Programmes
(SURE).
Fourthly, at a time when the National Minimum Wage scale was
not yet being fully implemented, the Government certainly, could not have been
oblivious to the fact that fuel prices would rise by 118% from N65 per liter to
N140 per liter. They ought to have envisioned the prospects of hoarding and
illegal marketing of petroleum products pushing the prices to N200, with the
added collateral impact of cost of food, transport, services and other living
expenses spiraling.
Beyond the convenient but untested argument:
Finally, beyond the convenient but untested argument, there is indeed a high
possibility that our four inefficient refineries, which collectively have an
installed capacity of
445,000 barrels per day, do produce enough fuel for national consumption at
their present 30% turnaround capacity, which yields a production output of
133,500 barrel per day. That being the case,
local production dismal as it is, yields slightly over 21 million liters per
day, an amount that outstrips the estimated daily national consumption of
12 million liters.
Why
then the subsidy arrangement?
Understandably, Nigerians are finally angry (see
Unangry Nigerians),
not just due to the insensitivity to the plight of the common man, but because
of the realization that the entire oil subsidy policy borders on a huge fraud
and racketeering perpetrated by the ruling elite on the masses with the
connivance of some elected and appointed officials within the government. For a
faceless cabal of less than twenty people to be sharing N1.3 trillion annually,
whereas 99.9 % of the population subsists on their meager wages, is
unforgiveable. The common knowledge that oil subsidy rose from N300 million
annually to N1.3 trillion, in a space of three years, is mindboggling.
The crux of the matter:
Nigeria has hit this sad juncture, which President Jonathan regrettably compared
to the civil war era, largely due to his lack of understanding of Nigeria’s
realpolitik and the essence of
decisions. He stands challenged,
even by his own admission. The crux of the matter is that a section of Nigeria
feels disfranchised by his leadership and a broader swath of the nation does not
trust him to do what he says. Hence, to some, this dual-tracked crisis amounts
to a loss of credibility and confidence in his leadership.
Paradoxically, President Jonathan wrote his own leadership evaluation report
when he proclaimed publicly to the nation’s utter consternation, that Boko Haram
had infiltrated every segment of the Nigerian government – the executive,
legislative and judicial arms included, along with the security agencies and the
armed forces and police.
Though candid, that was a damning indictment of his government. With such
pronouncements, one wonders if he is craving sympathy.
If Nigeria is on a civil war footing, he
cannot afford to be risk-averse in tackling the financiers and operatives of
Boko Haram, regardless of their standing in the society. The grave challenge now
is to see what recourse the president would take in the national interest.
I had characterized Boko Haram in this space as the “enemy
within”, and noted that the planning, execution and audacity of its violent
bombings bore traces of professional support and that its activities were
“now the top and most urgent national
security challenge confronting Nigeria” (see
Boko Haram: The Enemy Within).
The president’s recent remarks were in some ways deceptive, in that it hardly
acknowledged what is perhaps a well-known secret.
He did not unforgivably mention that he and his advisers, who benefitted
from PDP zoning policies, having willfully disenfranchised their northern
colleagues, stood to pay a political price for such acts (see,
The Run and Do Not Run Game).
Pretend as we may, the truth is that the nation is paying a price for the
president’s seemingly malign act of sowing political distrust in our politics.
He rules, but he cannot pretend to be unaware that some are out to ensure that
he cannot govern. He should decipher the resounding reticence of the northern
elite on the Boko Haram issue.
Again, it is worth underlining that the withdrawal policy is correct, but that
the implementation process was dismally flawed as it lacked clarity, the
desirable sequencing and more importantly, any modicum of humaneness. It is hard
to believe that there was not one rational, dissenting or compassionate voice
within the government. It is also ironical that no one in the administration had
the gumption to tell the president that he could withdraw the subsidy and still
leave the fuel prices at N65, and that the economy would not collapses or be
worse for it. The worst possible
adverse effect would have been a brief period of artificial scarcity.
Then again, since it was the thirty-six governors who initiated the
policy, the onus of selling it to their respective constituencies should have
been theirs. Alas, what the ruling elite did was protect the interests of their
friends and by implication theirs.
The Exit Strategy:
The president fumbled with the fuel subsidy withdrawal, but there is no need for
more bellyaching. The fact is that
good governance derives from political will and transparency, not from good
luck. There comes a time also when delusion meets with reality and a string of
good luck is broken by a spell of bad luck.
Sadly, the government has lost much credibility for precipitously
pursuing a withdrawal policy that was devoid of empathy. Still, the value and
impetus of the ongoing strike is that Nigeria’s true fight against corruption
and official malfeasance in very high places has finally commenced.
All said, the ongoing demonstrations
will run its course and the people will prevail in the end. Hence, President
Jonathan should end the impasse immediately by using an Executive Order to peg
the price of petrol at N65, while letting the subsidy withdrawal stand.
As an Ijaw saying goes: “He, who fetches
faggot-infested firewood, invites the lizards to play in his yard.” In that
context, President Jonathan can still
recalibrate and rescue his badly damaged presidency by letting go of some of
those who so ill-advised him on how to handle the Boko Haram scourge and the oil
subsidy withdrawal and by ensuring in the national interest that members of the
oil subsidy cartel are prosecuted an their ill-gotten loot recovered. The die is
cast. He is the president and the buck
stops with him. The world watches as
Nigeria spins toward the crag.
Without being facetious, I wish a Happy New Year and good luck to my fellow
Nigerians and to Mr. President.
With neither anger nor partiality, until next time, keep the law, stay
impartial, and observe closely.
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Hank Eso is a columnist for Kwenu.com. His observations on Nigerian, African and global politics and related issues, has appeared in various print media, journals and internet-based sites.
© Hank Eso,
14 January 2012.
Email:
hankeso@aol.com