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Nigeria: Escaping the “Greece Syndrome”

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A couple of days ago, a Nigerian resident in Singapore wrote on a popular platform that the Prime Minister of Singapore did a 40% pay cut and the President took over 50% after a review by human resources consultants that Singapore may not be insulated from the financial crisis ravaging Europe and part of Asia. For purposes of national unity, Singaporeans have not taken offense at the review.

An angry Nigerian trade Unionist wrote concerning Nigeria that deregulation of oil; subsidy will cause untold suffering and hardship to the Nigerian populace and it will affect all aspects of life in Nigeria. The writer claimed that when President Goodluck Jonathan was campaigning during the elections, he never told Nigerians about the implementation of deregulation of the oil sector. The writer said oil subsidy did not cause the non-provision of infrastructure in Nigeria or poor Turn Around Maintenance of the refineries. The writer further claimed that the Obasanjo administration invested $16 billion on power supply and there is nothing to show for it. The period has also witnessed the massive importation of generators to Nigeria which has enriched the importer rich and resulted in death, asthma, and cough and so on to masses of Nigerians. The writer doubted whether the pervasive poverty, poor water, infrastructure and unemployment were caused by lack of deregulation ( food for thought).

We never expected it but it has happened, maybe for the first time in Nigeria. President Jonathan seems to be doing everything for Nigeria to escape bankruptcy or what has become known as the “Greece Syndrome” What is leading Greece to bankruptcy? Should workers' standards of living be sacrificed in order to save the country, as the ruling class is trying to persuade us? Some people declare that the current level of bankruptcy was created by the so-called “insatiable tendency of the Greek people for wellbeing”, and also to the left leaders that tend to see national bankruptcy as “a conspiracy against the homeland”,

Whereas in Greece, the bankruptcy was occasioned by the fundamental contradictions of capitalism accentuated by corrupt institutions of capitalism that are beyond the control of the workers, the economic problems of Nigeria are caused by cumulative mismanagement championed by a group of self-serving, hawkish and predatory class of businessmen and comprador bureaucrats who do everything to sabotage the domestic economy to the detriment of the masses.

Public debt has been a problem in Greece. 67.5% of total tax income in 2009 went mainly towards the national and international banks and generally the parasitic holders of state bonds and Treasury bills, who have lent money to the state. The N28 billion Euros bailout package which was provided to the banks, equal to 12.4% of public debt, which could have actually been used to buy these banks. Tax evasion in Greece accounts for 20 billion Euros of lost revenue, accounting for almost 40% of the state budget deficit. With today's unjust taxation system, this amount never reaches the coffers of the state and most of it is absorbed by the owners of private enterprises. The newspaper Kathimerini has underlined the fact that in 2008, 15,300 enterprises did not pay any taxes. The Greek defense budget for 2009-2010 rose to 6 billion Euros. The result of all this waste and favoritism is that Greece is indebted to the tune of over the 300 billion Euros mark.

It is heartwarming that President Jonathan is doing everything, taking every step to escape the Greece Syndrome. Nigeria spends about N1.4 Trillion in subsidizing the importation of petrol, which is often diverted to other countries. Only in 2011, the Central Bank Governor Sanusi Lamido lamented that the sum of $16 billion was spent on subsidy and this has depleted the foreign reserves of the nation. He further cried out that subsidized products are being diverted to neighbouring countries such as Togo, Niger, Ghana, and Cameroon.

Nigeria's four refineries are decrepit and even if they were producing at installed capacity, the combined capacity would have been 445,000 barrels per day. However, the actual refining capacity due to obsolescence is 267,000 barrels, which is about 60% of what is consumed domestically. Daily petrol consumption is put at 35 million litres and this leaves Nigeria with the burden of importing 21.5 million litres of petrol per day. It was against the background of trying to meet domestic consumption that led to the importation of petrol by independent marketers.

Sadly, the independent marketers – most of who have turned billionaires engage in sharp practices. Most of them are reputed to have refineries abroad so the petrol they import is usually taken from their own refineries. In the course of importation, some of the products are mindlessly diverted to other countries where the subsidized product is sold at exorbitant rate. To make up for what has been stolen, Independent marketers' sometimes adulterate products, and most often the volume of petrol imported is often inflated. At the jetties, the importers connive with some unscrupulous personnel of NNPC to record false figures to create the impression that the marketers' in question had imported the products. The same class of thieving OLIGOPOLISTS, sabotage efforts at Turn Around Maintenance, TAM of the existing refineries. These are the advertise the Nigerian Government face in the hands of shylock importers who receive huge subsidies from the government. It was for these reasons that the President wielded the big stick of removing subsidy on petroleum products on January 1, 2011.

Government's position is that Nigeria cannot continue to pay for petrol that is imported; government would rather repair our refineries, build new ones and allow people to build refineries so that the N1.4 trillion we are paying to these dubious people called IMPORTERS can be saved to fix roads, the transport system, schools, hospitals, and provide electricity. In doing so, Government will create jobs for the unemployed youths. The State Governors will also have more money to invest in infrastructure and create jobs.


In order to share part of the pains of removal of subsidy Mr. President has taken several measures to reduce the cost of governance, including on-going and continuous effort to reduce the size of our recurrent expenditure and increase capital spending. He said “In this regard, I have directed that overseas travels by all political office holders, including the President, should be reduced to the barest minimum. The size of delegations on foreign trips will also be drastically reduced; only trips that are absolutely necessary will be approved” . President Jonathan went further to demonstrate that the policy of subsidy removal is in the interest of the common man. Accordingly, the President announced “For the year 2012, the basic salaries of all political office holders in the Executive arm of government will be reduced by 25%. Government is also currently reviewing the number of committees, commissions and parastatals with overlapping responsibilities. The Report on this will be submitted shortly and the recommendations will be promptly implemented. In the meantime, all Ministries, Departments and Agencies must reduce their overhead expenses. The deregulation policy is the strongest measure to tackle this challenge in the downstream sector. In addition, government is taking other steps to further sanitize the oil industry.

President Goodluck Jonathan in his broadcast to the nation has once more demonstrated his statesmanship and the determination to serve the nation, especially the ordinary Nigerians. He has announced a 25% slash of the allowances of political office holders from the President to the lowest political office holder. He has promised that in the weeks ahead, 370,000 jobs will be created for youths through the commencement of the railway rehabilitation scheme. He has directed all government agencies to evolve schemes that will cushion the hardship that may arise from the removal of oil subsidy. He has directed the immediate commencement of the comprehensive maintenance of the refineries to enable them produce at installed capacity, as government makes frantic efforts to build new refineries. The pragmatic zeal and charisma demonstrated by Mr. President show that he is a selfless leader who has the interest of the masses at heart. He is a great reformer and builder.

President Jonathan has already received commendation from the international communities. The United Nations, UN has commended President Jonathan for withdrawing the subsidy on petroleum products, describing it as “a bold and correct policy”. Prof Jeffrey Sachs – Special Adviser to the UN's Secretary General also commended Nigeria's president for his conditional grants to local governments for the implementation of the Millennium Development Goals, describing it as “one of the most innovative schemes of using national resources for local government development”.

Similarly, European Union, EU has said that it has confidence in Nigeria's economic and political system. The Minister of Foreign Affairs, Republic of Finland, Dr. Erkki Tuomoija, disclosed this while speaking to President Goodluck Jonathan during an audience at State House, Abuja. He stated that his country and most of Europe have confidence in Nigeria's economy and political system. “Your economy is doing very well, and many countries in Europe envy your growth figures”, he said, adding that “we have confidence in your democracy, and in your ability to deal with the terrorism and other challenges confronting you”.

President Jonathan has established a Committee to oversee the implementation of the Subsidy Reinvestment and Empowerment Program. This is to ensure that reinvestment of the petroleum subsidy funds is used to ensure improvement in national infrastructure, power supply, transportation, irrigation and agriculture, education, healthcare, and other social services, is in the best interest of our people.

To escape the GREECE SYNDROME, President Jonathan has directed all Ministries, Departments and Agencies of government to embark immediately on all projects which have been designed to cushion the impact of the subsidy removal in the short, medium and long-term, as outlined in the Subsidy Reinvestment and Empowerment Programme Document. On the 8th January, the President will formally launch a robust mass transit intervention programme to bring down the cost of transportation across the country. The programme will be implemented in partnership with state and local governments, labour unions, transport owners, and banking institutions, and supported with the provision of funding at zero interest rate as well as import duty waiver on all needed parts for locally-made mass transit vehicles, which will create additional jobs in the economy. These are pro-poor economic policies that are in tandem with the pursuit of the achievements of the0 MDGs.

With President GEJ at the saddle, Nigeria is poised to escape the GREECE SYNDROME. Mr. President has demonstrated genuine leadership in terms of policy focus and it is only proper that Nigerians: Labour; Civil Society, Professional Associations, Non-Governmental Organizations and the masses support the President to consummate the transformational agenda for the well-being of all.

Idumange John
Is a Ranking Member, Institute of Strategic Management, Nigeria

Disclaimer: "The views/contents expressed in this article are the sole responsibility of Idumange John and do not necessarily reflect those of The Nigerian Voice. The Nigerian Voice will not be responsible or liable for any inaccurate or incorrect statements contained in this article."

Articles by Idumange John