The President appears set to remove the subsidy on petroleum products from the beginning of next year. The opposition to the removal is digging deep trenches in preparation for the battle ahead. This battle will be bruising and long, or may end abruptly with neither victory nor defeat for either party. If it is won by either the President or the opposition to the removal, it will be an empty victory, one which would have cost more than a defeat. A victory by the opposition will reinforce its weakness, and serve as an impetus for the President to pursue more or different policies which will make up for his failure to remove the subsidy. In the end, the Nigerian people, particularly those being put forward as the potential beneficiaries or victims of the removal, will be worse off. This is the outcome of an issue being fought by people who have very little linkages with 75 percent of Nigerian citizens who live on the margins of existence, and who are likely to be completely unaffected, irrespective of the way the battle is settled. The interest of this class is not being championed by leaders who represent them, and who will ask how the poor will be affected by either the retention or removal of the subsidy, and who, if necessary, will negotiate the best deal for them either way.
The tragedy over the controversies over the subsidy removal is that it is being championed on both sides by elites, people who have massive cushions propped up against the effect of the retention or removal of the subsidy. The hundreds of millions of Naira being spent by faceless groups with curious titles putting out advertorials in print and electronic media at a small elite to convince it that subsidy is wasteful and corrupt, is wasted. The urban elite is largely unaffected by government policies, because it adjusts its living conditions by automatically securing more resources from governments. People who own three, four, five or more vehicles will not panic because the cost of petroleum goes up from N65 to N150. Extremely large take-home pays, and rampant corruption in both private and public sectors will absorb this increase. The urban poor will absorb increases in pump prices by adjusting the prices of their labour, petty commodities, or inventing new tactics to live on the boundries of criminality. Prices of everything will go up, and those with nothing to sell will fall through and join the widening bracket of Nigerians who have no means of livelihood at all. Rural populations will shrink, as the cost of their agricultural products cannot match the cost of production, or produce margins that will sustain the circle of reproduction. Urban areas will expand as more and more people, particularly young people, drift into them in the hope of finding jobs, or sources of living, which are extremely limited.
The leaders that are selling the subsidy removal argument will not feel its effect. They will not take a pay cut as a symbolic gesture to demonstrate to Nigerians that they share the pains of the removal, at least in the short-term. They cannot authoritatively tell Nigerians at what stage the benefits of the removal of subsidy will be felt, and in what form. They will not say what they will do about abuses and corruption which they identified as the reasons for the removal of the subsidy in the first place. And they will not tell Nigerians who is paying for the hundreds of millions of Naira in advertorials making a case for the subsidy removal. They may attempt to put forward tired and discredited initiatives aimed at reducing the hardship of the poor, but these will be absorbed and wasted by a corrupt bureaucracy and incompetent leadership.
The opposition to the subsidy removal is itself weakly-rooted in the genuine interests of the Nigerian people. Organized labour has taken up the gauntlet from day one on this issue, but its entire position is weakened by crass opportunism and a failure to critically assess the entire issues around the subsidy controversy. When government predicated its case for removal of the subsidy on the existence of widespread corruption and waste, labour should have demanded that government identifies and prosecutes those who perpetrated the corruption. On waste, labour should have demanded strong evidence that the subsidy is wasted, and who is responsible. Labour lost another propaganda battle when it allowed government to single out fleet-owning elite in cities as beneficiaries of the subsidy, instead of the poor. It failed to nail government through its failure to police and ensure compliance with the regulated pump price across the entire country, as a result of which less than 20% of the nation’s consumers buy petroleum at N65. It failed to make capital of the failure of government to stop large scale smuggling of products, re-cycling, bunkering and illegal storage and marketing, all of which add cost to the consumer. Organized labour failed to provide the Nigerian public with detailed analyses, or simple projections and implications of the removal of subsidy. It’s scare tactics and threats to shut the country down if government goes ahead with the removal only succeeded in getting a few elderly Nigerians to advise against it, while its traditional journeymen, the students, threw in their contributions. With Universities now closed because of ASUU strike, this traditional support may not come to labour early next year when it needs it most.
Another potential source of opposition to the subsidy, which is the National Assembly, is not likely to be counted among the most steadfast, or as consistent as labour. President Jonathan says he does not need the approval or consent of the legislature to remove subsidy. Experts he say he is right. So the most effective weapon the legislature possesses to influence the subsidy issue is to delay the passing of the 2012 budget, which is both a risky, and ultimately, a self-defeating strategy. If the President digs in as he well might, and insists on his right to remove the subsidy, he will marshall all the resources on his side, including the awesome powers of Governors, who have long concluded their calculations on what to do with their shares of the removed subsidy. They in turn will lean on the legislators, who are very likely to put up a token resistance in the form of a demand for some symbolic palliatives, and then buckle under. Anyone who puts much store in the capacity of the federal legislature in resisting the President on budgetary matters has not read its history well. If anyone needs further evidence of the posture of the legislature, its recent endorsement of the President’s huge virement with a few weeks to go to the end of the financial year will be a useful reference point. A continuous delay in passing the 2012 budget will also hurt the legislature, and it is more likely to demand a huge allocation around constituency projects from the removed subsidy, than risk a very lean first quarter next year.
A combined resistance to the removal of the subsidy should take the form a resolute obstruction from the national assembly, and a careful and informed engagement of the government by labour and civil society. The strategy should be predicated on a number of demands. First, persons, officials or groups who have been identified as corruptly enriching themselves around the subsidy must be named and prosecuted. Second, government must inform Nigerians what the removal of subsidy will entail. How much will petroleum cost, and why? How will the price of petroleum without subsidy differ from the current high prices of diesel and kerosene whose subsidy had long been removed? What will be the effect on other essential consumer prices? Third, government should say what it intends to do with the removed subsidy. Will it build more refineries to bring down the cost petroleum? Will it build and rehabilitate more roads and power plants; more schools and hospitals; equip and improve our universities? Will it make our lives safer and more secure? And in specific terms, what and where and at what cost will it do all these? Since the proceeds from removed subsidy will go to States, what do they intend to do with the increased funds? Above all, why should Nigerians believe that removed subsidies will not move from bank accounts of the subsidy cartel into bank accounts of leaders and government officials?
The Nigerian poor is being dragged into a fight over which it knows very little. If government wins this fight, the people have very little knowledge over what it will do with the spoils. It says it would have stopped corruption and waste; but the people suspect that corruption and waste have merely changed locations and masters. If government loses this battle, it would have cost billions of public funds in its execution; and government will say Nigerians prefer corruption and waste around the subsidy on petroleum; so let it be. It may even then look into other areas to make substantial improvements in its revenue, since it says the economy will collapse unless the subsidy is removed. Those opposing the removal of subsidy are very likely to lose this battle, but the nation would have paid a very high price in losses, strikes, disruptions and hardships. Worse, the opposition would have failed to pin government around putting forward specific activities or projects which it will undertake with the removed subsidy.
The class of the poor in Nigeria will soon go through another harrowing experience. Its elected leaders say it will have to endure some more hardship, but is not saying when it will end, or what the long-term benefits will be. The opposition to the leadership is fighting a losing battle against the combined forces of a Presidency used to having its way; a legislature weakened by its structural dependence on the executive; and the intimidating powers of State Governors who have smelt huge revenues. Before the battle is over, there will be many casualties. But the biggest will be the real interests of poor Nigerians who simply want a government that protects them and improves their welfare, and is not behaving as if it intends to.
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