SUBSIDY STRIKE: WHEN OPPOSITION PARTIES TAKE OVER
History often emerges in retrospect. And in politics, there is always a place in history for any elected president to make tough decisions. Since politics is often not a popularity contest, such tough choices may not go down well with the electorate. And the power to achieve result almost always come like a painful pill, hard to swallow. But how to apply it and the time to administer such pill is what every president does at a certain point in his tenure.
That's why events become events are considered significant when looked back on. When he was British Prime Minister, Harold Macmillan was asked what in his opinion tests a politician most. He replied, 'events, dear boy, events.' Events, history has proved, do define every president's place in history, even when historians don't, because historians are often in a hurry to reach a conclusion.
Events in the last one week no doubt have been a painful one for most Nigerians. This is as a result of the withdrawal of fuel subsidy and the strike called by organised labour. The deaths, the scenes of horror and the ugly spectacles that were witnessed in many states were mainly because some people under the guise of subsidy removal spearheaded the protests.
The dizzying consequences of the removal of subsidy can be gauged from the high expectations many have, of president Jonathan. Of course, many had thought that the transformation of the country as promised by the president would come easy. As a result many of such people are asking is: this the same man who told us the inspiring, lifting story of 'I had no shoes, I know where the shoe pinches.' This is the kind of question that the President's political foes have been trying hard in the past one week to misinform.
A much harder question is, whether the President has what it takes to tackle Nigeria's intractable problems. The facts remain that although all politicians the world over are known to contradict themselves sometimes, and it's almost impossible to remain perfectly consistent and ideologically pure, the exigencies of the times can make a president stake his image and reputation for what he believes will be the long term benefits for the country and its citizens. Which is why in the short-term, economic arguments alone are not sufficient to persuade a disillusioned citizenry to swallow a tough pill.
While the strike lasted, it was clear that some persons or groups used as a guise to perpetrate other criminal acts or avenge a grudge against the Jonathan government. Such was the case in Niger, Lagos and Oyo states, among other states. In such states, the strikes was a tipping point to vent other frustrations. Most of the protesters ignore the fact that only recently, the president inaugurated a youth employment scheme, aimed to create gainful employment for one 10,000 youths in the country. There is also no doubt that the cost of governance has become too high, especially with the hefty votes on overheads in the past few years, whereby so much has been voted to sustain the profligate National Assembly members to remain in their comfort zone.
But, in a shared sacrifice, President Jonathan, during his nationwide broadcast, penultimate Sunday, announced measures to curb government expenditure in line with a belt-tightening regime arising from the removal of subsidy. These measures include 25 percent cut on basic salaries of political office holders, overseas travels for government officials, including those in the presidency, review of committees, commissions and parastatals that have overlapping responsibilities, as well as a drastic reduction of overhead costs in Ministries, Departments and Agencies (MDAs). All of these are in addition to the recent launch of mass transit buses with a zero rate of interest.
However, the violent response to the strike in states like Lagos and Oyo states were motivated beyond the subsidy removal. That of Lagos was surreal and with an ironic twist to it. It was taken over by opposition parties comprising mainly the Congress for Progressive Change (CPC) and the Action Congress of Nigeria (ACN). In many of the rallies in Lagos, the CPC vice presidential candidate in last year's election, and pastor of Latter Rain, Tunder Bakare, used the platform to excoriate president Jonathan. He was short of calling for an overthrow of his government. Other speakers at the protest rallies in Lagos are well-known opposition chieftains such as Femi Falana Prof. Pat Utomi, Dr. Tunji Braithwaite, etc whose parties lost to the president in the last election. It has also been revealed that most of the crowds at the Lagos rallies were 'rented' as well as the musicians that featured.
It was all politics and little to do with the subsidy matter. Their intentions were clear: portray Mr. President as a wimp, incapable of piloting the affairs of the country. That's why such a sticky issue as the removal of subsidy should not be allowed to be used as a platform for self-serving interests. There's no doubt that the protests of the past week were substantially sponsored to created divisions in an already chaotic political atmosphere. The fact remains that this is the time to make that needed tough choice and deregulate the downstream oil sector. The insistence of government that subsidy has to go is the reality of the times. Nigeria remains the cheapest country in the West African sub-region where the pump price of fuel is less than N150 per litre. In Ghana, a litre of fuel goes for N190, in Niger Republic and Togo, a litre of fuel goes for between N197 and N200.
Clearly, the benefits that will come with the deregulation of the downstream oil sector which the removal of subsidy entails cannot be sacrificed on the altar of protests or strike. Simple economics shows that deregulation will ensure free and fair competition, and give the consumers a variety of choices to choose from the competing outlets like what is currently obtainable in the telecom sector. Besides, government has always said that the current subsidy regime has benefited a few who have become stinking rich at the detriment of the majority. This position has been validated by the statistics from the Central Bank of Nigeria (CBN). The CBN governor, Lamido Sanusi has repeatedly said that, to continue subsidizing the product will collapse the economy.
At present, the huge domestic debt has hit an all-time high of N6 trillion. What this means is that Nigeria might go the way of Greece if nothing is done urgently to shore up government's dwindling revenue. Under the present subsidy regime, smuggling of petroleum products to neighbouring countries has become a brisk, easy-profit-making business at the detriment of the economy. This is not helped by the deliberate sabotage of our refineries by private investors who had been given licence to build new ones. Therefore, deregulation is the best policy for the oil sector, will stem corruption and waste in government and ginger reinvestment for national development, while many industries will source their materials locally, less dependent on imports. So much has already been lost to the strike.
Though it is hard to quantify the losses in revenue as a result of the strike and protests, a conservative estimate puts it at N1.5 trillion. This is huge for an economy already in dire straits. The Minister of finance and Coordinating minister for the economy, Dr. Ngozi Okonjo-Iweala stated that with the Federal government's expected share of the subsidy savings of N478 billion, government will tackle the supply side of the equation which will entail curbing the revolving doors of corruption in the oil sector, as well as channel the funds to fix social infrastructure, such as construction, completion and rehabilitation of the refineries, rails, key federal highways, hydro stations, water schemes, information technology, health care, among other key projects. It is for this reason that government has set up the Subsidy Reinvestment and Empowerment Programme (SURE). The Board is headed by a tested and proven technocrat, Dr. Christopher Kolade. The Finance minister who has come under a fusillade of attacks since the subsidy controversy began, has also assured that government is prioritizing resources into areas that will have the most impact on Nigerians and the economy.
No doubt, President Jonathan's remaining years in office will not be fun. But to get the job done, he must be focused on his transformation agenda, be firm and diligent, create a mood of strong national unity and a strong desire for renewal of hope. How he goes about getting all of these done, will define the breadth of rebuilding his image and reputation that have been battered by his policy on subsidy removal.
He needs practical wisdom, experiential knowledge, common sense in an uncommon degree, in the pursuit of collective good of Nigeria. The pressures and demandingness of the office he occupies come with a huge prize. It is the prize of high expectations from both those who voted for him and those who did not. But trust is central. At present, there is a deficit of trust in all tiers of governments in Nigeria today. In the absence of trust, governance does not work. In that maelstrom, a president is caught between change and calamity.
George, a public affairs analyst writes from Abuja