THE POLITICS OF COMMON WEALTH AND SUBSIDIES IN NIGERIA
Karl Marx, following the assault of capitalism on postmodern economies would forever be remembered for postulating material conflict of opposites as the necessary cause of economic crisis in modern societies.
That is, social and economic relations often give rise to political and social crisis. And that the quest for food meant for the stomach is the primitive cause of human social problems. Social , economic and political crises arises because of conflicts inherent in conflicting values and commonwealth.
The problem of Nigerian economy and development is not merely because of material inadequacy but because of the social nature of salaries, gratuities, pensions on one hand and profit maximization on the other hand, all predicated on common wealth.
National budget and the rituals that follow it every year is predicated on commonwealth but the uses and misuse that trail it is the cause of the social and political crisis of the moment in Nigeria, namely, electoral reforms, zoning democracy, rule of law, robbery, kidnapping, unemployment and corruption.
The post agrarian period in the Nigeria's development history has witnessed income generation from nascent sectors like banking, manufacturing and agriculture, yet the basic or primary strength of Nigeria's subsistence remains the dwindling oil sector, the hitherto, major source of Nigeria's common wealth.
The idea of a special development fund called common wealth has been interestingly epitomized in the crude oil account or federation account prompted by the principles of economic adequacy. It is an instrument of saving by the federal government under the principle of regulation which account for subsidies in a number of socially engaging interests especially in oil.
The concept and function of the common wealth underscores national unity, the essence of government and its populist agenda as well as strengthens the bond of relationship among different ethnic groups and religious denomination in the country.
That is why national consensus or dissensions, uses and misuses of power are all about the politics of the common wealth. Niger Delta violence and terror and the government's responses are the politics of the oil wealth. Deregulation, regulation, monetary and fiscal polices in Nigeria are issues in the politics of the common wealth. The threat of scrapping of oil subsides, salary negotiations, threat of labor strikes and government responses are all reactions in the politics of the common wealth.
The conception and origin of consolidated or federal account can be better appreciated as an indictment of the CBN (Central Bank of Nigeria) whose function it has taken over either for good or for worse, hence both operates simultaneously as dispensers of subsides, lending and social engagements. Subsides are associated with the Central Bank's conception of retail banking as exemplified in his role as the sole seller of official foreign exchange and retail of funds at concessionary rates to the private sector. Whether this approach is wrong or right, it is all a political response, to sharing of national wealth or to economic problems arising from multy -diversity and multy -ethnicity.
The question of subsidy also arises when the fiscal and monetary authority create naira equivalent of wrongly withheld public sector dollar proceeds. This is aimed at controlling deficit financing of the expenditure of the government which usually results to high inflationary fiscal deficit.
Under the subsidy regime social engagements and politics of common wealth are consummated when the central Bank authorizes the Federal
Account to release funds to the beneficiaries who ordinarily undertakes purely retail financial transaction of converting the respective dollar allocation into realized naira revenues for government business through the deposit money banks.
This is often called a substituted deficit financing which takes care of wrongly managed dollar transaction in the capital market. Yet because the beneficiaries are either Bank agents, government official and their compradors the benefits of this subsidy policy regimes is left hanging in the circle of elites without reaching he grassroots.
Another subsidy regime emanates from efforts to combat liquidly surfeit that naturally results form high levels of fiscal deficits when CBN uses treasury bills to build an anti-inflation federal domestic national debt. Under this fiscal regime government is striving to strike a balance between the interest of the civil societies and the privileged sectors of the economy.
But this is a dream far from reality because inflation makes the rich richer and poor poorer. There are numerous subsidy instruments, many come and go with governments but which are unsatisfactory, bourgeois and elitist oriented and lack transparency.
Maduabuchi Dukor is professor Philosophy at Nnamdi Azikiwe University, Awka and Executive Director, Essence Library.