Nigeria: A Smouldering Rage

The nation-wide strike in Nigeria against a petrol price hike ended under rather curious circumstances. The strike called by labour unions had crippled the economy safe for the fact that the oil pipelines continued to deliver their load. Labour leaders and civil society coalitions entered into dialogue with a government that favours monologues. It was not surprising that the game was over before the labour leaders knew it.

Nigerians woke up at the dawn of the New Year to learn that the price of a litre of petrol had been jerked up by about 120 per cent. Petrol now costs 141 Naira and 200 Naira (about $1) per litre in an economy where the minimum wage is 18,000 Naira (about $110). We note that even before organised labour called out workers on strike, citizens had already hit the streets in protest against what they see as an insensitive and unacceptable action by the government.

As negotiations went on, labour insisted that government had to revert to the pre-New Year pump price of 65 Naira per litre. As the street protests grew in size and creativity, and as government glaringly lost in the communications battle, they resorted to intimidation and use of brute force, sending the military to the streets of Lagos and elsewhere, against peaceful protesters. Labour suspended the street rallies and protests in the early hours of Monday 16 January. By 7 o’clock that morning the president addressed the nation using a script that was already circulating in social media up to four hours before then. With that speech he pegged petrol price at 97 Naira a litre. No reasons given as to how that figure was arrived at. Five hours later an obviously harried labour leadership called off the strike claiming that this was after wide consultations with their constituents as well as civil society. As it happened, civil society groups could not locate anyone who agreed that he or she was consulted. Thus the underpinning forces that resolved the gridlock are yet to be known.

Analysts are busy putting pieces together and trying to see who won or lost this episode in the long struggle for socio-economic justice in Nigeria. We will not do that here. We will rather examine some of the arguments canvassed by government agents for the removal of the so-called subsidy, which many people believe does not exist in the first place.

The response of government to the massive uprising was quite worrisome. First of all the government presented a front that suggested that there were no options to the move they had made. The speeches by the president and the many presentations by the governor of the Nigerian Central Bank, the ministers of labour/productivity, petroleum resources, information and finance, remain persistently paternalistic and convey the message that they do not hear the dissensions across the nation. In moments of dramatic expression, the Minister of Petroleum Resources demonstrated on television how the government’s hands were tied on the matter of fighting the rot in the petroleum sector. It would be interesting to know why the government allows itself to be bound hand and foot by thieves!

The major anchor on which the petrol price hike has been tethered is that government is spending a disproportionate amount of the national wealth on subsidising the importation and circulation of petrol in Nigeria. The number one reason given by the minister of finance in her brief on fuel subsidy is that from 2006 to 2011, about N3.7 trillion was spent on subsidy and that a whopping N1.348 trillion was spent in the first ten months of 2011. She projected that the figure would reach N1.436 trillion by the end of that year. This figure is said to be 118 per cent of the nation’s capital budget. New information now claims that the N1.348 trillion figure includes subsidies paid for kerosene. This was not said when government embarked on their town hall monologues and copious advertisements that regularly wrapped front pages of newspapers and magazines.

The debates that ran alongside the protests showed that a huge chunk of what was paid as subsidy in 2011 was actually ‘arrears from 2009 and 2010.’ Veteran activist lawyer Femi Falana raised this issue on a recent television debate (11/01/2012) and posed the critical question about the way statistics were used by government in attempts to get Nigerians to accept the huge leap in the pump price of petrol. The government has failed on this elementary point to use the figure of what was actually spent subsidising the cost of petrol consumed in Nigeria in 2011. They prefer the bogus figure that includes arrears for 2009 and 2010.

Nigerians are beginning to believe that the size of the cash doled out in “subsidies” in 2011 can be explained by the fact that this happened in an election year.

Nigerians are also told that the only way to stop the smuggling of petroleum products is to get Nigerians to pay a higher price for the product. Really? One official even said that Nigeria’s boarder is so vast that it cannot be policed and therefore smuggling will thrive without a price hike. Really? And who is supposed to watch the boarders, to protect the citizens?

We hear over and over again that the lower petrol costs do not benefit the poor. The reality on the ground just a few days into the new price regime has shown that this is not convincing argument. Small-scale entrepreneurs, for example those who run barbershops, depend on small petrol-powered electricity generators to stay in business. With huge public power deficits, many homes are powered with the same type of generators. Nigerians buy potable water from suppliers who own water boreholes. Some of these citizens’ water works are powered with the same type of generators. Because of absence of public goods and services we run autonomous or deregulated services at home and at work.

Another argument for the removal of subsidies on petrol in Nigeria is that in the league of oil producing countries the price in Nigeria is only higher than that of Brunei, Yemen, Oman, Algeria, Kuwait, Bahrain, Qatar, Saudi Arabia, Iran and Venezuela. Whereas Ghana recently increased the price of petrol by about 20 per cent, in Nigeria it is a minimum of 120 per cent. Do not forget also that the Ghanaian economy is not run on petrol powered electricity generators. Nigerians have seen that it is more helpful to extend the comparison to the minimum wage figures of the countries also. It is at that level that the hole in this argument becomes apparent.

OPEC Member countries Fuel Price per litre (Naira)/ Minimum Wage (in Naira)
1. Venezuela 3.61/ 95,639
2. Kuwait 34.54/ 161,461
3. Saudi Arabia 25.12/ 99,237
4. Iran 102.05/ 86,585
5. Qatar 34.54/ 101.250
6. Algeria 63.55/ 55,957
7. Libya 26.69/ 23,813
8. Iraq 59,66/ 25,813
9. Nigeria 140-200/ 18,000

NON OPEC countries
1. USA 157/ 197,296
2. UK 334.41/ 295,644
3. Oman 48.67/ 91,583

The Nigerian government continued to talk tough while the number of protesters on the streets swelled. In fact some of the spokespersons managed to hiss out their disdain for the protest without moving their lips. The SURE (Subsidy Reinvestment and Empowerment Programme) promises are taken with a pinch of salt by a populace who see these as the sort of political campaign talks they are used to hearing.

Nigerians are not opposed to making sacrifices that would put the nation on a sound economic footing. The government’s effort at taxing citizens so as to generate more revenue should not be embarked on without showing seriousness about halting profligacy by public structures. Why can our political office holders (executive and legislative) not take a 50 per cent cut in their salaries and allowances? Why the retinue of advisers and ministers?

Nigerians have been bemused by the amounts inn the 2012 national budget earmarked for expenditure on food, cutleries, newspapers and medical facilities for pets.

In and outside of government, immoral display of wealth is an indication of primitive accumulation through dispossession of the poor or some less than transparent means. We can pay attention to individuals that take up several pages in the newspapers to celebrate birthdays within the range of 30 to 50 years whereas simple birthday cards can do the job. The same indicators can be noted from newspaper page uptakes for individuals whose cronies take up several pages to send congratulatory messages; such persons get political appointments or receive chieftaincy titles, honorary degrees and other things that bloat their egos. There are many other ways to track the leakages in the economy where productivity brings poverty and non-productive “enterprises” yield scandalous wealth.

Tensions need to be doused and one way will be for public officials to watch what they say as the incoherence in government circles is adding to a smouldering rage even after the bon fires have been smothered. There is still anger in the land!