SUBSIDY REMOVAL: THE WRONG CHEERLEADERS

It now appears that the much-touted resounding endorsement from the Nigerian private sector for President Jonathan’s plans to remove subsidy for petroleum was only a public relations gimmick after all. Those movers and shakers in the private sector who attended the President’s Retreat a few days ago in the comfort and security of the Presidential Villa, and who publicly expressed wholehearted support for the decision, apparently had no authority to speak for the Organised Private Sector on the matter. The groups more traditionally associated with the Organised Private Sector such as the Nigerian Employers Consultative Association (NECA); the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA); and Manufacturers Association of Small and Medium Enterprises (NASME) have released a statement saying that no one at the Retreat had their authority to support the planned removal of the subsidy. They say the 42 individual businessmen and women who endorsed the policy acted on their own, because the organisations which represent the private sector were neither invited to the Retreat nor consulted by the President over the issue.

          The repudiation by the organised private sector for the support which select and privileged businessmen gave the subsidy removal plans by the organised private sector group is a sign of opening skirmishes in the epic battle which this nation will witness over the plans. It is a rather predictable development when viewed against the obvious attempt to acquire a one-stop-shop support for a policy which has many complex elements. The President’s plan to rally support for the policy through a hastily-arranged Retreat, which itself had to be moved from Obudu in Cross River State back to the Presidential Villa never really looked like the genuine article where genuine consultations are concerned. Three thousand people (3000) hand-picked participants at a Retreat on the economy is neither a representative sample of Nigerians, nor a serious effort at engaging a hostile and suspicious citizenry. Perhaps the President was carried away by the support from Governors he had met a few days earlier, all of whom cannot wait for their share of the proceeds of the removed subsidy. Even with that support, the meeting with some legislators a few days earlier on the issue, during which some frank advise was given to Mr. President by many legislators ought to have cautioned against a stage-managed support from a group which will win with or without subsidy.

          In any case, the bottom appears to have fallen out of the attempt to get a critical sector to support the removal policy. The 42 leading businessmen and women who issued a press statement supporting the removal said the subsidy on pump prices of petroleum products is inefficient, corrupt and a waste of scarce resources. They said the subsidy only benefits a few Nigerians, while the financial burden it places on Nigerians is unbearable. They therefore support the removal of the subsidy, even though they urged government to consult widely with labour and civil society organisations, and to make sure that the benefits of deregulation accrue to the poor and underprivileged Nigerians.

          Leaders of the organised private sector said these signatories to the document supporting removal of the subsidy are individual business owners, multinationals and favoured businessmen in the private sector. They claim that they are the real private sector, and they have not taken a position on the issue. So the subsidy controversy has claimed its first casualty, which is private sector unity and cohesion over the issue. Perhaps not surprisingly so, given the fact that the private sector has been the major beneficiary of the corruption around the subsidy. Some private sector operators have made billions in dubious claims over imported products. Some imported the product, claimed huge amounts in payments as subsidy, and then helped export the same product for higher profits in neighbouring countries. Others bought the products at lower prices and sold it to 75% of Nigerian consumers at highly-inflated prices. Hundreds of thousands of importers, distributors and peddlers made huge profits from a system which paid billions in public funds as subsidy to people who sold at controlled prices only to Nigerians who live in Lagos, Abuja or a few other large cities.

          So when the 42 businessmen and women who spoke in favour of the removal claim that the subsidy is fraught with corruption and inefficiency, they know what they are talking about. It is the greed and impunity of wealthy businessmen and corrupt government officials which robbed Nigerians of trillions in subsidies, while they buy products at very high costs. It is quite possible that some of the 42 signatories are deeply involved in importing, or financing the import, or banking the proceeds of petroleum products. Some of them will know the intricate details about bogus imports, recycling, re-export or the elaborate multiple layers of distribution that forces rural folks to buy petrol at four or five times what they should. Some will have privileged information over why our refineries do not, and will not work.     This group of businessmen and women will be hard put to find a listening ear in Nigeria when they speak about corrupt and inefficient policies. They are the architects of the system, and are, even now, placing themselves in vantage positions to take maximum advantage of whatever is the outcome of the subsidy controversy.

          It should not surprise anyone that government has found in these big businessmen and women willing cheerleaders. Government itself would know a thing or two about most of them. An agreement on a common position over a matter that has huge implications for the standard of living of Nigerians will therefore not be difficult to struck. But government will be making a serious mistake if it thinks that endorsement from this group is a useful substitute for hard and serious discussions, consultations and negotiations with Nigerians over the issue of subsidy removal. The battle will be that much more difficult to win if government unwittingly adds the real organised private sector to the army of opposition against the subsidy removal. If President Jonathan is serious about convincing Nigerians of the merits of the removal of subsidy, he has to take the nation and the task more seriously. Forty-two very rich Nigerian businessmen and women make a pathetic cheerleading team.