Ethan Zuckerman’s online home, since 2003

Occupy Nigeria – a reactionary occupy movement?

On January 1st, Nigerian President Goodluck Jonthan put into place a reform that he and key ministers have been discussing for years: he ended a 20-year old subsidy that kept Nigeria’s petrol prices the lowest on the continent. When Nigerians went back to work on Monday, the 2nd, they discovered that not only had petrol increased from $0.40 to $0.91 a litre, but the cost of private taxis, minibuses and other forms of transit had increased in price as well.

By Tuesday, the 3rd, protesters in Lagos were blocking access to petrol stations and shutting down stretches of motorways by building and burning barricades. On the 4th, protesters in Kano shut down petrol stations and threatened to burn down a newspaper they believed was supporting the removal of the subsidy. They occupied Silver Jubilee Square in the center of the city and attempted to maintain an encampment overnight, though police responded by firing tear gas and, allegedly, working with armed gangs to clear the square through violence and intimidation. The protests are led, in part, by two powerful trade unions, National Labour Congress and Trades Union Congress, who have promised to “occupy” Nigeria until the subsidies are restored. They plan a nationwide strike, beginning January 9th.

Michael Bociurkiw, writing in the Huffington Post, notes that it wasn’t obvious that petrol price increases would trigger such widespread protests. After all, there’s lots to protest in the country. Despite being sub-Saharan Africa’s largest producer of oil, most Nigerians are quite poor, the nation’s infrastructure is shambolic, and political corruption is widespread and well-documented. A rigged election in 2007 (and controversy over a mostly-clean election in 2011) led to some heated rhetoric, but little visible protest.

But petrol prices affect every aspect of life in Nigeria. The country has no (functioning) mass transit systems, which means urban dwellers are reliant on a complex system of minibuses, taxis and motorbikes, operated as private businesses. Those businesses will be sharply affected by the petrol price increase and pass the costs on to their customers. And because Nigeria’s electrical grid and power producing stations are notoriously unreliable, most businesses use generators to power their operations. Those generators have just become at least twice as expensive to operate, which is likely to increase prices at a wide variety of businesses. Complicating matters, Nigeria is least stable in the north, where tensions between Muslim and Christian groups have erupted into violence, and where the terrorist acts of Boko Haram, an extremist organization which wants all non-Islamic education and culture banned from Nigeria, have pushed President Goodluck Jonathan to declare a state of emergency in the North. Because the north is distant from the ports where Nigeria lands imports, goods are likely to increase sharply in price in the already troubled region.

Jonathan is not the first Nigerian leader to try to remove the fuel subsidy. Two of Nigeria’s military leaders – General Ibrahim Babangida and General Sani Abacha both tried to end the expensive program, and both were forced to back down due to popular opposition.

On the one hand, it’s exciting to see a Nigerian population that’s often overwhelmed into inaction taking to the streets. Stories about Muslim and Christian protesters finding agreement over shared prayer space – and images of Nigerian Christians encircling and protecting Muslim protesters at prayer in Kano – are genuinely encouraging. And there’s no doubt that making a living was a tough prospect for ordinary Nigerians with the subsidy in place and that a tough situation will get worse without it.

That said, ultimately, I think Nigeria needs to get rid of the subsidy. It’s incredibly expensive – depending on how you account for it, it cost between $8 billion and $16 billion in 2011. Nigeria’s tax authority collected just under $18 billion in 2010, and budgets for key sectors of the Nigerian economy are substantially smaller than the cost of the subsidy: defense spending is proposed at $6 billion, education at $2.5 billion, health at $1.8 billion. And while the subsidies make life easier for ordinary Nigerians, they’re a massive boon to the few companies the government allows to import refined petroleum… and contracts to import those petroleum products are a likely source of patronage revenues for corrupt government figures.

The IMF has pressured Nigeria to remove fuel subsidies for years, and Nigerian Finance Minister Ngozi Okonjo–Iweala, an internationally celebrated economist and anti-corruption reformer has been a powerful champion of reforms, offering long briefings to the President and other leaders on the importance of the reform effort. (Rumors have circulated that she threatened to resign if the subsidy wasn’t eliminated. She refuted those rumors in classic Nigerian fashion… on Twitter.)

Ideally, the Nigerian government would use the monies freed by eliminating the subsidy to address some of the country’s chronic problems: weak road and rail infrastructure, unreliable power, run-down refining facilities. It’s possible to imagine a Nigeria where imported petroleum products were less necessary, if the country had functioning rail systems, a reliable power grid minimizing the need for generators, and refineries that could produce diesel and gasoline locally. Given the history of corruption in the Nigerian government, it’s not hard to understand why many Nigerians are skeptical that the monies released from the subsidy will go anywhere other than in politicians’ pockets. As the BBC observes, many Nigerians feel like the fuel subsidy is the only government service they actually see.

If you want to understand opposition to removal of the subsidy, an oddly partisan view can be found on the Occupy Nigeria wikipedia page, which is quite far from NPOV, but a very interesting read nevertheless. Statements from Central Bank of Nigeria Governor Lamido Sanusi make the case for subsidy removal in a piece on Bloomberg News. His basic argument: Nigeria needs to borrow a lot of money to build infrastructure, and responsible lenders won’t give the country money as long as it keeps doing boneheaded stuff like subsidizing oil consumption instead of building infrastructure.

Even though I think Nigeria needs to end the subsidy, I would be surprised if Jonathan can sustain these changes in the face of a sustained strike. There’s tension already over the idea that this isn’t Jonathan’s “turn” at the presidency – there’s a popular notion that Nigeria’s presidency should rotate between northern Muslims and southern Christians. The previous president, the Muslim northerner Yar’Adua died in office, and Jonathan finished his term. Some believe that, by this rule of thumb, the 2011 president should have been a northerner… Some northern activists and some labor activists have made threats that they will make Nigeria “ungovernable” during a Jonathan administration. It’s not hard to see how protests over fuel could make Nigeria vastly harder to govern.

I’m interested to see Nigerian take on some of the rhetoric and tactics of the Occupy movement, including the occupation of a public square in Kano. I’ll be intrigued to see whether any of the global energy over Occupy goes to support the Nigerian protesters. The irony, I fear, is that while the global occupy movement seeks to equalize income disparities and fight government corruption, the Nigerian movement is currently pursuing radical and important reforms, and the Occupy Nigeria protesters are fighting against that change. Read one way, Occupy Nigeria is a conservative movement fighting to keep a dysfunctional status quo in place, which seems at odds with other branches of the movement.

19 Responses to “Occupy Nigeria – a reactionary occupy movement?”

  1. kiah says:

    you are obviously very clueless about Nigeria or Nigerians

  2. TheRustGeek says:

    As usual Ethan, you have pulled together a more nuanced view than most. However whilst there may be an economic argument for removing the subsidy, I suspect that the primary grouse of the aggrieved is not its removal per se, but the ‘suddenness’ with which it is being pursued, without any clear strategy to alleviate its impact, especially given the certainty of the multiplier effect it will have on other aspects of life.

    The subsidy may not be ‘income’ in and of itself, but this effect impacts whatever income the man on the street accrues. For instance, generators and cars need to be fuelled and transport costs and the price of ‘essential commodities’ correlate very strongly with the pump price.

    If indeed, the intent of the government is to pursue ‘radical and important reform’ as you assert, surely the blatant waste incurred on the National assembly (nearly $1b in this self same budget, for c. 400 people) offers greater ‘bang for the buck’ than withdrawing a subsidy which demonstrably has a multiplier effect on the common man on the street?

  3. Ethan says:

    kiah, yes, I suspect you’re right that my semi-annual trips to West Africa and work with NGOs and academics in Lagos and Abuja leaves me “very clueless about Nigeria or Nigerians”. Thanks for your helpful intervention.

    TheRustGeek, I agree that attacking waste throughout the Nigerian budget is a worthwhile thing to do, and I also agree that a single-step elimination of the subsidy was probably unwise. But I do think this is a truly massive obstacle for Nigeria in obtaining funding from the World Bank, IMF, etc. And I think that building infrastructure, particularly electric power infrastructure, in Nigeria would have at least as much of a multiplier effect than the subsidy, which appears to give disproportionate benefit to those lucky enough to import and market fuel.

  4. kiah says:

    you are very welcome. save yourself the costs of your semi-annual trips where you probably move around in armored vehicles and spend 24hours in guarded houses and focus on your own country. Nigeria does not need people like you telling it what it needs.

  5. Ethan says:

    No armored vehicles, no guarded guesthouses. Lots of work with Nigerians who’ve invited me to come work with them. But I think it’s unlikely that you’re actually listening to anything I say, as you’ve decided I’m on the other side of the issue and are therefore making ad hominem attacks.

  6. Mark Malone says:

    Its pretty odd that the neo imperialism of western corporations basically taking Nigerian oil and completely messing over the Niger Delta etc doesnt come into this equation at all.

    Apols Ethan is im missing something, but if the Occupy moevement is to begin to become something of a global perspective movement we would see that it is not present fuel subsidies that are stopping investment, but international architecture of capital accumulation itself founded upon fossil fuel extraction.

    As for the World Bank and IMF, these again are unelected unaccountable institutions that are part of the problem, and obstatcles to democratic solutions. Now i understand that both real politik and pragmatism mean that we can only work from where we are, not a utopian democratic abstract, but there also require a radical (roots based) intellectual and emotional honesty from within our movements to name and articulate that expression.

    Also id imagine that within the current popular dissent new alliances and social imagination get born as is always the case. It is a mistake id say to imagine Occupy Nigeria as an homogenous movement.

    Sorry if this is a bit rambly, but as an activist coming from Northern Ireland, a very smaller place indeed im also aware of nuance and etc that are often left out.

  7. Mark Malone says:

    Some other perspectives from the SaharaReporter network

    “The Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN), and its chair, Nnimmo Bassey, in solidarity with civil society groups under the aegis of Coalition to Save Nigeria, staged a public protest through Benin city in a show of opposition to the removal of the petrol subsidy by the President Goodluck Jonathan administration.

    The coalition of civil society groups in Edo State includes the Nigerian Bar Association, Nigerian Union of Journalists, Nigerian Medical Association (NMA),Bike Riders Association of Nigeria, market women and students among others.

    “For ERA/FoEN, the decision to remove the so-called subsidy is totally objectionable and smacks of insensitivity to the genuine wishes of the Nigerian people which is that government must make the refineries work and probe the cabal that they say exists in the petroleum sector,” the group stated in a press release.

    Bassey challenged the notion of subsidy, pointing out,”it is the community people living side-by-side the oil fields and the Nigerian environment that actually subsidizes the cost of crude and refined products.”

    He disputed the government’s claim that the central purse subsidizes the cost of petroleum products.”

    http://saharareporters.com/news-page/environmental-activist-nnimmo-bassey-leads-occupy-nigeria-protest-benin-city-over-gasoline

  8. law&justice says:

    Ethnan, allow me to suggest a slightly varied understanding of the motivation for the protests. While the trigger is the removal of the subsidy on petroleum products (or as government would rather describe it, the deregulation of the downstream petroleum sector), there is a much deeper frustration with the level of impunity and corruption in Nigeria. I suspect that even a reversal of the decision on the removal of the subsidy will not pacify the protesters. There is talk now of forcing a fundamental change in the way Nigeria is governed in order to bring about greater social justice and accountable government.

  9. THE VOICE says:

    Your view is rather interesting but it does not fully address the underline issues of the oil subsidies removal. First of all the Nigeria people have little to no trust in their government. How can this people trust that the money and scarifies they will be making would be used probably? It is very easy for you to say since you haven’t walked in their shoes. How did the country get that poor in the first place? It is nearly impossible to justify the remover of oil subsidies if the government is spending over a billion on feeding its President a year and overpaying it ministers. The obvious truth is that most Nigerians will support the removal of the subsidy if they trust the Government. But why should they?

    The Excess Crude Account and Sovereign Wealth Fund were supposed to finance the same projects that the “Subsidy savings” is being projected to finance, but given the precedent of how the ECA has been managed, there is no Nigerian Government that will be able to convince the people to bear short term suffering in the hopes that the Government will remedy their suffering in a few months or years. It’s an issue of trust, and I don’t blame anyone who does not trust the Government.

    A sign of goodwill from the President will go a long way in building trust. What that goodwill should be, is left for his administration to figure out. They should consider temporarily removing the immunity clause until 2015. The initial spending of the “subsidy savings” should not be done under immunity. The Government might get Nigerians to listen to them with that proposition among other concessions from the Government.

    Both sides need to give up something. If we are giving up money from our pockets, Government should also be giving up something they love so much. After all, we are all doing it for the interest of the country.

    Secondly, the oil subsidies doesn’t only affect the pocket of the average Nigeria, it affects the poor, I am yet to understand how the government expect the poor to afford such an increase without creating some welfare plan. This population of the country (which is almost half of the entire population) can barely make it through right now. Everyone is talking about the long term benefit but no one is considering the short term consequences. A poverty stricken population will go hungrier and might not even live to enjoy the benefit of the subsidies.

    I urge you to research further into this issues before writing articles like this, at the end of the day making frequent trips to the West African countries and working with NGO does not in any way shape or form qualify you to criticize the people of Nigeria for attempting to protest its evil and self-centered government. Also, it is only reasonable that if the IMF is worried about the fuel subsidies then it should be even more worried about the government budget of Nigeria. Where is it heard of that a poverty stricken country should spend over a billion feeding it president or could it be that the IMF is concern over the wrong things???

  10. Ethan says:

    I appreciate the comments from Mark, THE VOICE and law&justice, and feel I should clarify what I’m trying to write about here. While I believe that removing the subsidy is something Nigeria should do in the long term, I agree that removing the subsidy in a single action is probably unwise and creates a great deal of hardship for ordinary Nigerians. My goal is not to be an apologist for the Jonathan government. It’s to take a look at an issue that most Americans know little about and try to give a slightly more complicated view of the picture than, “Look, Nigeria has an Occupy movement, too.”

    You may disagree with my reading of the situation, and it’s helpful to receive comments that add more information to the picture or challenge assumptions I’m making. Comments that amount to “You’re not Nigerian, so you don’t/can’t understand” are less helpful. I am well aware that I don’t understand Nigeria as well as Nigerians do. I suspect I do understand Nigeria a little more than most Americans, who’ve not traveled to the country or worked there, and I’m hoping to build some increased understanding of a complex situation for a global audience.

  11. HealNigeria says:

    My understanding of the situation is the level of distrust that the Nigerian citizens have over the ability of the Government to alleviate their situation that is the problem.

    First is the wildcat that was flown by the Government that there was consultation going on and that the subsidy would likely be removed in April 2012, if at all but that the outcome of the consultation will determine if the subsidy will be removed. Now, the bravado style of removal as an unpleasant new year gift is what has pitched the people against the Government. Nigerians want the best for themselves but do not trust that a government that can not be truthful in simple matter such as the date of subsidy removal can be entrusted with a bigger matter such as judicious utilization of the savings from the removal of the subsidy.

    Again, the acknowledgement of the existence of a cabal is a slap on the Presidency who by such singular comment has proven to Nigerians that there are sacred cows in the Country. The bigger question is why should the masses pay for the sins of the ‘untouchable’ in the Society? It beats all economic reasoning. It therefore goes to further fuel the distrust of the people in the ability of the Government to do the right thing when faced with pressure from the so called untouchables.

    You may also wish to note that Government has not provided any form of alternative or options for the people. Government has not said it will import fuels that will meet local consumption such that it is able to checkmate the so called untouchables. The same set of people are still going to be saddled with the importation of fuel into the country, which means they have absolute power over supply. Now from my little understanding of economics, if demand is inelastic and you have control over supply, you can control the price. If the same marketers decide to create artificial scarcity, and prices goes up to N500 per litre, that leaves the citizens to the hawks because they will still have to fuel their generators to run their businesses anyway. So where does the whole thing lives the common man.

    It’s an evil the Government has visited on the people without providing any form of alternative.

    Nigerians have been plundered and our economic resources have become personal assets of a few in Government and oil and gas sector. I pray the little exercise that have been instigated by the Government since 1st January 2012 does not snowball into what the Government will not be able to manage ultimately.

    It is well with Nigeria!

  12. Crhab says:

    Ethan, writing about Nigeria is not the easiest of tasks for anyone. Some Nigerian writers tend to be overly sentimental about issues and present a lopsided view while some foreign writers’ perspectives are detached from the socio-political realities of the country. You have attempted to present a balanced opinion and I was pleased to read it.

    A contradiction in your piece though, you recognized that -quote many Nigerians are skeptical that the monies released from the subsidy will go anywhere other than in politicians’ pockets-unquote. Having made that observation, which I believe amounts to corruption, why did you suggest in your closing paragraph that the Nigerian protesters are not fighting against government corruption but are trying to maintain a dysfunctional status quo? It would appear from your earlier statement that the status quo is indeed corruption and the protesters are fighting against the government’s seeming attempt to help some politicians embezzle the monies hitherto set aside for subsidy. Please clarify.

    On the issue of income disparities which you have identified as one of the themes of the global occupy movement, you would find that some of the Nigerian protesters have complained about the lavish amounts allegedly paid to government executives and senators. They are upset that the subsidy removal requires a great deal of sacrifice for the already struggling lower and middle class while the upper class politicians are unaffected. You would notice that they have called for the reduction in the allowances paid to the executives and the senators. These are on the occupy Nigeria wikipedia page referred to in your article.

    I searched (on the web) for a direct government statement explaining the reasons for the subsidy removal and I have been unable to find one. There are a number of statements attributed to the government which I found on news sites that I consider credible. One of such is the government’s promise to cushion the effect of the subsidy removal by providing 1600 mass transit buses and reviving rail transportation. In a country with over 140 million people, 70% of which already live below the poverty line, I doubt that the buses would have any significant cushioning effect even if they are free. Besides, I would expect the cushions to be provided before the subsidy is removed. It appears the Nigerian government removed the subsidy prematurely as the railway is still under construction/rehabilitation and the mass transit buses are yet to be delivered to the country. Perhaps the protesters are also against fighting against such unsound administrative policies.

    A further comment on what you described as a mostly clean election in 2011. A large number of votes for President Goodluck Jonathan were based on sentiments like his name, the campaign line that he had no shoes as a young boy and his Niger Delta origin, a region though providing crude oil in Nigeria had little government representation. While I initially found it ridiculous that anyone would vote for a candidate for the first two reasons, it is easy to understand why a large number of people struggling in the economy would identify with someone that had a background in poverty, someone they believed would represent the interests of the lower class and provide them with some economic relief and with a name like Goodluck, surely it must be a sign from God! Some other candidates had better credentials in the area of fighting corruption and ensuring financial accountability but a large number of people chose the current president because they thought he would effect changes with some consideration for the lower class. One can understand the betrayal they feel at the uncushioned subsidy removal. With the level of sometimes inexplicable goodwill that the president enjoyed before the protests, I am of the opinion that he could have pulled off a subsidy removal, if it was absolutely necessary, without as much ruckus. It only required charisma on his part. For instance, announcing a reduction in the allowances of top government officers, including his, and putting the cushions in place before removing the subsidy would have gained the trust of some. The Voice’s earlier comment has captured the essence of this point.

    I hope you find my comments useful in situating the Nigerian protest in a realm above the singular theme- the removal of oil subsidy. The link below is another interesting article on the subject.

    http://awarenessfordevelopment.org/index.php?option=com_content&view=article&id=66:nigeria-fuel-subsidy

  13. Samaila Mohammed says:

    It is incredibly untrue for you to claim that Nigerians pay the lowest price for petrol, when you asserted, without any evidence:”On January 1st, Nigerian President Goodluck Jonthan put into place a reform that he and key ministers have been discussing for years: he ended a 20-year old subsidy that kept Nigeria’s petrol prices the lowest on the continent”
    In Egypt, Premium Motor Spirit (PMS)or petrol in Nigeria, unleaded, that is of a higher quality than the one being dumped on Nigerias, is less than two Eyptian Pounds, i.e. L.E. 1.75, which is less than 33 US cents per liter. This is the central claim upon which you proceeded to support the fuel subsidy removal by the insensitive government of Mr. Jonathan. For your information, even if Nigerians were to be the largest beneficiaries of fuel or any other subsidy in Africa or the world, that would not, by itself be a reason for you to base your argument. Moreso, that subsidy is not peculiar to Nigeria, if you consider the US subsidy of farmers that has significantly contributed in impoverishing the livelihoods of ‘poor’ African farmers.

  14. Nii says:

    @Kiah the views shared above aren’t that dissimilar to the views held by the organiser of the Occupy Nigeria in London protest. In principle he is not against the removal of the subsidy. What has caused the furore revolves around the timing and the lack of certain pre-conditions. Here are his thoughts http://www.myweku.com/2012/01/interview-nicholas-ibekwe-an-organiser-of-occupy-nigeria-in-london-uk/

  15. Fe.muwe. says:

    Dr. Zuckerman may frequent Ghana, but may not realise that Ghana and 9ja are not on the same planet as far as state/civil society relations go. Ghana has nonfarcical elections, in which ruling parties are actually defeated, and perhaps because of this basic accountability, corruption and immiseration are far less by any measure. 9ja still groans under the successor to colonial occupation forces. How this bifurcation separated two nearby British colonies is an interesting seminar topic for historians and game theorists. As to the “subsidy” issue: (i) statistics and transparency being absent in 9ja, no one should accept on faith that these huge payments ever reached the declared recipients. (ii) The New Year stunt dowsed a burning ember of public anger with a bucket of gasoline. “Experts” should realise that 9ja people are forced to use petrolem products for illumination and cooking, not just for transport. (iii) OccupyNigeria is a core member of the “Occupy” family, because like its congeners in NYC etc its raison d’etre is to resist the political dominance of FINANZKAPITAL. 9ja people understand profoundly well that unelected Mrs Iweala and fake-elected Mr. Bacluck are just the zombie messengers of neoliberal diktats.

  16. Fe.muwe. says:

    TYPO: read “Mr. Badluck” (as he is now universally known)

  17. Ethan says:

    Thanks, Fe.muwe – no doctorate for me, actually, and I do recognize the differences between Ghana and Nigeria. For the past few years, I’ve been lucky enough to travel to both. I appreciate the pushback, though, and in a more recent post, I’ve tried to better recognize the frustration Nigerians understandably have with Jonathan.

    -Ethan Zuckerman

  18. A. Kuffour says:

    Dear Mr. Zuckerman,
    According to President Jonathan, in 2010 $13billion was spent to purchase fuel for self-generation of electricity in Nigeria. That’s about 6.7% of the 2010 GDP:

    Not only has the demand for fuel for self-generation of electricity, since then, grown but the subsidy removal has already doubled all those costs. What would be the impact of that on inflation and ultimately on the GDP as those costs go over 10%? Everyone seems to be taking subsidy removal as an economically sound recommendation without any attempt to assess the particulars. Dogma.

    The Governor of the Central Bank of Nigeria displays acute symptoms of tunnel vision in basing his assessment of the impact of the subsidy removal on the insignificant weight ascribed to fuel for transportation in the Consumer Price Index.

    You seem to follow him in not seeing both the forest AND the trees. As far back as October 2011, about the time the Jonathan govt. began to suggest that it would remove the subsidy, I looked at possible scenarios after a removal of the subsidy, exploring the possible impacts on the individuals earning the proposed, new minimum wage (of course, over 90% of the working age population won’t be so fortunate to as to earn even that measly sum of about $110).I used the CPI weights for my projections, and it didn’t look pretty then. Needless to say, subsequent events have more than confirmed my calculations. This has given me cause to wonder what those making policy in Nigeria with the better data that they must have do to earn their keep.

    Implementing that new minimum wage was one of the triggers for the removal of the fuel subsidy. If you or Mr. Bociurkiw, for your different reasons, cared, you should have done some simple number crunching to gain an understanding of the ramifications of the Govt’s action. And if you couldn’t be bothered, you could at least have scoured around the web for some other viewpoints beside whatever it is economic Hit Women who have nothing to recommend them beyond being career technocrats and ‘world renowned Economists’ had led you to believe.

    The IMF has been leaning on Nigeria to deregulate and privatize for over a decade, and the Fund began to see some adoption of the strategies it suggested with the return to civil rule in 1999. Although the state had not, and still hasn’t, provided adequate Power, the IMF continued to urge deregulation beginning with Telecoms, instead of with Power. Banking has also followed, along the path of restructuring, and the field of Retail has seen an opening up of its gates to all comers. Cement manufacture, a major sector of the Construction industry also saw major privatizations.

    In this period of privatization and deregulation, Nigeria has seen remarkable GDP growth. Some of that, of course, is due to rising oil prices. But all that growth has not automatically translated into Human Development. Growth has, however, resulted in Telecoms, Banking, Retail and Construction expanding and demanding more fossil fuel for self-generation of electricity. Herein lies the contradiction in prescribing the standard medication of deregulation and privatization, beginning with Telecoms, without first attempting a sound diagnosis of the particulars of Nigeria’s condition.

    It fascinates me to no end when recommendations are made for the privatization of Nigeria’s public institutions where the assets and revenues have, for all practical purposes, been privatized through Corruption. There usually is no sign of an awareness that what is being suggested is a second order action which obeys a different set of rules from the privatization of ordinary, inefficient public agencies. A case for deregulation and privatization can be made but I doubt that’s what should be the priority in Nigeria. Even so, the order in which the strategy has been executed is open to debate. Anyway, a sound case for the removal of fuel subsidy still hasn’t been made for Nigeria.

    Obiter: In light of the foregoing, Ghana celebration of a decade of constant supply of electricity makes speculations about Nigeria that are based on the Ghanaian experience is dubious. Brazil, on the other hand, which also has 6to grapple with the challenges of a population of over 100million, like Nigeria, learned under Henrique Cardoso that deregulation and privatization are not magic cures. Please, do some research. By the way, Brazil imports about 60% of the Gasoline it consumes locally, similar to Nigeria, and Brazil plans to build 5 refineries, through Petrobras, solely or in joint ventures. The Nigeria Govt hinges its hopes for the development of new refineries on private investment.

    Sir, there’s already a marked excess capacity of refining globally. Demand in the first world for petroleum products is already showing the impacts of recessions, ageing populations, environment friendly legislation and sentiments, the improvements in the fuel efficiency of autos and the exploration of alternative energy. Oil industry players are declaring losses on their refining businesses, selling off their refining businesses all due to the dwindling margins. In a few words, it’s a ‘Red Ocean.’ Even the most cursory research will confirm this.

    China, Brazil, the Middle Eastern oil exporters are the ones buying and building refineries and they are all doing it with heavy government investment. This may be an important development to consider, for both you and the Jonathan Govt. which has argued that the subsidy is the reason why there have been no private investment in new Nigerian refineries.

    Please, consider that other oil producing countries may subsidize their citizens’ consumption of petroleum products to prices below the cost of refining locally. Nigeria is subsidizing for the cost of NOT refining. Perhaps, if the local refineries worked the subsidy would NOT be necessary. You may want to consider the substantial value of lost GDP that the failure of Govt to operate the Nigerian refineries optimally has been costing the people of Nigeria. I know that if the local refineries met local demand, the pump price of gasoline would be at least 38% less than the price of subsidized fuel.

    And since the Govt (PDP has been in power for over a decade; Jonathan as an individual has been in leadership for 4 years, 7 months and over 10 days to date: first as VP, then as Acting President, then as President, then as elected President) has due to malversation and ineptitude failed to justify the large sums invested in turn around maintenance of those refineries, and none of the defalcators have been brought to book. Never once has the Attorney General of the federation gone to court to seek to recover funds lost in such black holes or to repudiate the claims of the creditors of odious debts. In short Govt. wishes to sweep Corruption under the carpet, finding it more convenient to inflict hardship on the 99%. The symptoms of Moral Hazard are everywhere apparent.

    Govt in Nigeria is synonymous with Corruption especially in the Petroleum industry. Please, read this KPMG audit commissioned by the Federal Govt. of Nigeria and which that same Govt has done its utmost to keep hidden. Maybe you’d be willing to speculate on why no punitive action has yet been taken. In the near future all that is hidden will be brought to light and we’d see whether you’d revise your position on the stance of the Occupy Nigeria movement as it relates to Corruption.

    I’d just venture a few more words on Development as I’ve focused largely on issues relating to governance and GDP Growth. The Subsidy Reinvestment and Empowerment Programme (SURE) which has been proposed would annually appropriate sums that the programme’s Board and secretariat cannot disburse effectively. You can download a copy

    There are no mechanisms for accountability integral to the programme design. The M&E is to be contracted out to an ‘independent body.’ The programme most surely would duplicate constitutional channels, leading to undue wastage. The SURE document itself is a remarkable development document that has no log frame nor provides the projected cost implications of its 12 or so schemes. All these are warnings. The by now familiar M.O. of Corruption and waste.

    Based on Govt’s own numbers, the formal sectors, including both the private and public, accounted for the employment of less than 5million people in 2002. Let’s be generous and assume that privatization and deregulation have raised that number to 15million in the past 9 years. That’s still 15million jobs to support a population of over 160million! Since most of the poverty indices would be based on the formal sector numbers which are more easily acquired and tractable is it any surprise that close to 70% of the Nigerian population are held to live in poverty?

    It’s not in question that the informal sector is what has kept the real Nigeria humming along. That’s where most of the large number of unemployed, working age youth have been earning some kind of income. Indeed, it’s what’s compensating for Govt’s long standing failures to create or facilitate the creation of jobs. And, based on my knowledge of a large number of the micro-enterprises that sustain both the rural and urban poor, Gasoline is a significant input in the many varied forms of production. These are people who have evolved means of livelihood in adaptation to that lack of infrastructure which you gloss over.

    If you could understand what you gloss over and how insensitive and callous your submissions are, how smug your pronouncements are and how you have comfortably sided with the powerful against the weak, I believe you’d issue profuse apologies. But we do not have any quarrel with you. Your ignorance does not even recommend you as a worthy interlocutor. It’s the Govt of Nigeria that we must engage in any form of dialogue it will understand.

    And sir, it may interest you to note that it is the ventriloquist Jesus, of Nazareth, in the Gospel according to St. Luke ch. 19 v.12 who had charged his followers to ‘Occupy’ till his return. I’d be interested to see how the global, reactionary Occupy Movement has adopted the methods and ideals of Christianity.

  19. A. Kuffour says:

    I wonder how Okonjo-Iweala proposes to solve the problems and fiscal strains Government would encounter on the budgetary expenditure side when actual prices are higher than budget projections. She has been silent on this.

    She should already be familiar with such fiscal strains. The removal of the fuel subsidy will do worse to the economy than the benchmark oil price ‘peg’ that undergirded the 2005 & 2006 budgets and which caused so much deficit financing when she was first Minister of Finance. It got to a point in 2006 that a supplementary budget was sent to the National Assembly and the Executive would have continued to press for the approval of that supplementary budget if the IMF hadn’t prevailed on them to withdraw it at the time.

    It isn’t only the people that would experience hardships due to inflation; Government would, too, in translating its capital vote in to projects and in working to hit its developmental targets, and since it’s the self same, long suffering people who were meant to benefit from those projects and safety nets the people are catching the worst of it both ways. The government seems oblivious to the fact that it is sawing off the very branch on which it and its budgetary projections are sitting by removing the fuel subsidy.

    I admit I sound ridiculous, even to myself, for pretending the Govt. has any intention to serve the people in any meaningful way, quite sad but true. And, really, what’s happening to the receipts from crude oil sales?

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