CAN WE TRUST THIS GOVERNMENT?

Gabriel Uchechi Emeasoba

January 1, 2012 remains a red-letter day in the annals of the Nigerian history which no true Nigerian will ever easily forget. Indeed, for years to come, it has registered itself as a remarkable date, just like June 12, 1993, that will key into the spontaneous memory and psyche of the Nigerian people as a defining moment in the socio-political experience of the country and the evolution of the peoples common will. On this very first day of the New Year, when majority of the countrys population had retired to the villages for the joyful celebration of the yuletide, the President, Mr Goodluck Ebele Jonathan announced the removal of subsidy from Premium Motor Spirit (otherwise known as fuel), the last of the nations petroleum products to be so deregulated over the years. Because this declaration meant untold hardship for the Nigerian masses, it was really an unwholesome New Year present from a President who hitherto could boast of a reasonable percentage of the belief and trust of the Nigerian citizenry. After that declaration, it was really difficult for the Nigerian people to understand where they went wrong and because so many, including the elite, did not find rationale in the punishment of waking up one morning in hell without justification, they unleashed their angst openly against the government and sought for every available opportunity to declare their disbelief and lack of confidence in the government of Goodluck Jonathan. In the face of the melodrama that surrounded the removal of subsidy from the price of fuel, this article hopes to look at the controversies generated by the deregulation of the downstream sector from a dispassionate perspective. The aim is to present to Nigerians in a straightforward manner the real gist of the matter concerning subsidy and subsidy removal. There is hope that it will expose the common people maturely to the ongoing debate and help them appreciate the points of the contending parties in the subsidy debate and as well, form a more responsive approach and attitude to themselves and the government. From the beginning, it must be accepted that prior to January 1, 2012, so many people did not know much about the subsidy issued by the Federal government for the regulation of Petroleum products. Subsidy suddenly became a national clich only because the cost of living was skyrocketed on the first day of the year with the increase in the price of fuel from N65

to N150-N250 across the nation. But the truth of the matter is that right from the 1980s, the Federal Government has been subsidizing the price of Petroleum products in the country. How did all this start? Before 1965, there was no locally built refinery in the country. In those days, international petroleum marketing companies in the country, like Shell, were importing their stocks independently from their own refineries located abroad, until the first indigenous petroleum refinery was built at Alesa-Eleme near Port Harcourt by the Nigerian Petroleum Refining Company (NPRC). With time the other four refineries were built in Warri, Kaduna and Port Harcourt to meet the increased local demand for petroleum products in the country. The Federal military government then had intended that these four refineries would be able to provide enough products not only for local use but also for exportation of Petroleum products outside the country. But this was not to be because one still remembers that the exportation of petrol and diesel from these refineries only lasted from 1990 to 1991. The reasons for this were simple. Coupled with the increased local demand for petrol, the Warri and Kaduna refineries were not producing optimally due to many internal and external reasons. What all this meant was that even with the presence of the local refineries, petroleum products were still imported into the country by different marketing companies by the 1970s and 80s. With the dilapidation of these refineries and the failed kangaroo BPE privatization exercise of 2006, Nigeria depended largely on importation for the local use of petroleum products. But how did it come to be that the Federal Government started to subsidize the prices of petroleum products for local consumption? Before 1973, the prices of petroleum products varied from one place to another in Nigeria. But by 1973, the Federal military government introduced a uniform pricing system and set up the Petroleum Equalization Fund (Management) Board to administer this system in the country. What this implied was that this board will determine the net surplus revenue recoverable from or payable to oil marketing companies from sale by them of petroleum products at such uniform prices as may be fixed by the Petroleum Minister. The uniform pricing regime led to a remarkable shift in the consumption patterns throughout the country to the extent that as early as 1981, the Federal Government had to release a cash grant of N23 million in order to subsidize the system. This subsidy was to balance the difference of claims over contributions by the oil marketing companies. Even though from 1973 t0 1978, the Federal government was not called upon to provide

such grants, with the establishment of the Nigerian National Petroleum Corporation (NNPC) in 1977, it became clear that to sustain the uniform pricing scheme of petroleum products (which did not and still does not exist anywhere in the world), the Federal government with time would have always to provide cash grants to the oil marketing companies in the country. Like this, the nation fell into the subsidy inferno. With time, the unfortunate provision for the government regulation of the downstream sector became a new business. And when something becomes business in Nigeria, you can almost be quite sure that it has become a camp jungle for and a repository of consummate corruption, fraud and crime. In the 1990s, with the direct or indirect connivance of the Federal government, the oil marketing sector was hijacked by a fraudulent cartel that will unleash a wide corruption poison into the country to the extent that oil business would soon become the dream of the growing population. To be an oil marketer then meant to belong to the rich class and those outside this class were left to suffer without attention. No wonder, from the 1990s, the gap between the rich and the poor has continued to widen in Nigeria. A bit of facts will be necessary at this point to appreciate what the rich class has gained from the jumbo increase in fuel subsidy in the country over the years. In 2006, the fuel subsidy was N261 billion but this increased to N648 billion in 2008. By December 2010, it was N622 billion, and then, by December 2011, it has gone as high as 1.4 trillion. In fact, between 2006 and September 2011, the federal government has shared overN3.655 trillion to the powerful players in the petroleum sector just in pursuit of importation of refined petroleum products. This happened while a great majority of the Nigerian mass were living in abject poverty, being deprived the necessities of a decent life and of good infrastructure in the energy, transportation, power, education and agricultural sectors as well as in other sectors. The government purse was left bankrupt as a result, leaving a whooping debt record for the nations future generations. In the midst of the fray recently, the Nigerian senate Joint committee on Petroleum, Appropriation and Finance, headed by Senator Magnus Abbe released the list of all the oil barons and how they all stole from the fuel subsidy scam till date. The funny thing is that the list contains the names of around 100 companies not only in the downstream sector but also even in the construction sector. A fast survey of that list (which one can still find in www.the voicenewsmagazine.com) reveals that Oando Oil (owned by Wale Tinubu), African Petroleum (owned by Femi Otedola), CONOIL (owned by Mike Adenuga), MRS Oil (owned by Sayyu Dantata,

Aliko Dangotes brother) are among the powerful players in the petroleum sector who have shared over N3.655 trillion from fuel subsidy in the past five years. Other players include: Pinnacle construction, TOTAL Oil, Enak Oil, Bovas and Co. Nig. Ltd, Obat, IPMAN, ACON, Atio Oil, AMP, Honeywell, Emac Oil, D. Jones Oil, Eternal Oil, Capital Oil, Dozil Oil, Fort Oil, Integrated Oil and Gas and others. Apart from the direct negotiations of this cabal with the government on the subsidy issue which have dealt a heavy blow to the nations economy, the regulation of the petroleum sector over the years has led indirectly to a lot of illegal, corrupt and criminal practices (or call it businesses) in the country in many ways. In the first case, provision of fuel subsidy gave room for and encouraged oil bunkering in the country in the past few years. What most of these oil barons has been doing is that they go out of the country into other African countries, build refineries there and then come back home and bunker our oil pipelines, take them to their personal refineries outside the country and bring them back as imported products at high prices. When they arrive, the Federal government would subsidize the ear-shutting prices for them to sell to Nigerians at N65. Unfortunately, most of them still hoard these products already subsidized and then smuggle them out to other African countries where without subsidies they can still sell at high prices, leaving the country with intense scarcity of petroleum products. What this means is that the Federal government ends up subsidizing not only for Nigeria but also for other African countries. Is it then surprising that since 1989 when the last refinery was finished, no attempt has been made to build another refinery in the country, or even resurrecting the dilapidated ones? Why would refineries be built here in Nigeria when there are over 15 refineries across African countries, employing over 300,000 workers, owned by Nigerians, most of whom belong to the top echelons of power and influence government decisions? Why would Boko Haram jihad stop when there are enough clandestine oil moguls in the corridors of power who have amassed enough wealth that they have the capacity to continue supplying sophisticated weapons and arms to touts till Jesus comes again? President Goodluck Jonathan may have had all these in mind when he was declaring the removal of subsidies on January 1, 2012. When all these facts are laid on the table, the truth indeed must be said that the emergency removal of fuel subsidy on the New Year, when looked at on its own without any other attachments, is a very courageous step by the government of President Goodluck Jonathan which is unprecedented in the history of Nigerian politics. By all principles of

econometrics, subsidization of consumption in the downstream sector is not the best bet for any nation. This much we must have to accept. As a matter of fact, listening to the economic team of the President on the issue, especially, to Dr Ngozi Okonjo Iweala, it is clear that without the removal of this subsidy, this nation would be on the verge of collapse in few years. But the question that remains to be answered here is whether actually the abrupt removal of fuel subsidy on the New Year was the first thing the President should have done. Experience has shown that the Nigerian people are not afraid of making sacrifices but the problem here is that they found no reason to lead this campaign for sacrifice at this time in the nations life. This was expressed by the wide protests across the country led by organized labour and Trade Unions. For Gods sake, the poor masses felt that they have been at the receiving end of irresponsible governance in the country for many years. It is not justice that they wake up one day to hear that only an increment in the quantity and quality of their hardship would save the condition of their land. After all, he that is down fears no fall. Unfortunately, the people were made to believe that instead of the problem coming from above, it is coming from below and this they have refused to accept. Imagine the fact that of all the petroleum products in this country, fuel is the last to be deregulated and yet there is nothing to show for the series of deregulation programmes in the country. Before the government of President Olesugun Obasanjo, the Aviation sector was deregulated and there was no school built and no road constructed till date. Kerosene was deregulated in Obasanjos regime and there was absolutely nothing to show for it. There were no roads built after the deregulation of the price of gas too. How were the people expected to believe that this time, things will be different? It is true that President Jonathans government may not have been deeply involved in the whole history of fraud in the downstream sector, the issue here is that the same people have suffered from the government all these while and they have the right to say now that enough is enough. If they would trust Jonathans government and be ready to take any risk with him, they need to be assured that they would not be played again. For any subsidy removal to be fair on the people, the government must first of all put some structures down that will convince the people that the accruals from the removal of subsidy will not go into private pockets again. The question on the lips of every Nigerian is: how can we trust this government? There is fear everywhere, especially when people remember that in the economic team behind Mr President is an oil magnate that has benefitted from the

fraud in the petroleum sector for years. Already the whole process of the removal of fuel subsidy by the President can be faulted on many grounds. Apart from the fact that nobody would forgive the timing of the removal of this subsidy which left so many stranded and helpless without a hint, one must also observe that there is no sense in pronouncing a policy that would dismember the polity before seeking for avenues to ameliorate their bewilderment and death by instalment. At best, such an action showcases the attitude of a government that does not have the interest of the people at heart. For this reason, so many Nigerians felt that the government of the country is weak against the strong but strong against the weak. And that is why they must be understood when they take to the streets, notwithstanding the technical accuracy of removing fuel subsidy. After all, peaceful protests as an instrument of negotiation and dialogue with the government are supported both by international law and moral theology. If the government is honest enough, so many issues must be addressed on top before coming to the people. The government needs to address the fraud and corruption in the petroleum sector and bring the guilty to justice. Such justice would include freezing of assets and seizing of property for the development of the country. Why has no responsible question been asked about the BPE probe? Anybody who has followed the developments in the downstream sector would easily see that if the privatization scheme of 2006 was not fraudulently done, our refineries would be up and serving today. What happened? Who were responsible for the crimes of those days and what have been done to them? If the government is serious about saving Nigeria from impending doom, these questions must be answered. Some days ago, Mr President directed the Minister of Petroleum, Dr Mrs Allison Mmadueke to carry out a large scale probe of the business of subsidy in the downstream sector. With the help of the EFCC and the Joint Senate committee led by Senator Magnus Abbe, the process of this probe is ongoing, starting with the investigation of N.N.P.C and P.P.P.R.A Nigerians are happy with these courageous moves made by the government but the clouds of uncertainty are not yet cleared. What will the government do with the report of these investigations? Will it be business as usual? How many people were convicted after the Oputa panel report? Will the vision of these probing committees be truncated when they stumble over sacred cows? The Government must know that at this period in the nations history, the people need to rebuild trust in the government. Everybody is watching; if nothing happens again after all these probes, what it means is that the

Nigerian citizenry would have sacrificed for nothing. Nigerians are tired of hearing the declarations of the government that they know the sponsors of the Boko Haram sect; they want to see them brought to book for wasting innocent lives and property and setting up the reign of fear, anger and suspicion in the land. It is very shameful that in a country like ours, a suspect of Boko Haram attack is declared missing from the hold of top security officers and yet our government expects Nigerian citizens to be patriotic. How can we believe in a government that that allows the payment of a 100 million naira to the family of the leader of a sect that has wasted many innocent life? What type of justice is meted out to the numerous families who have lost their beloved ones in the spate of the attacks of this sect? What then do we gain being law abiding Nigerians? If care is not taken, in a matter of years, this country will degenerate into a Hobbesian state of nature. Some days ago, the President cut the cost of governance by 25 percent. What a step in the right direction but that is not enough! The civil society would want to know how that is implemented. But this is not even enough. Only their basic salaries would be touched and that is nothing in a country in which the quarterly allowance of a senator is over 45 million. Let the government touch their allowances and we would take them serious. Would that cut also affect such irritating figures as the 2011 executive expenditures people read from the newspapers? How can we talk about sacrifice in a country a sitting Presidents kitchen allowance and light refreshment allowance runs into billions yearly? How can we preach sacrifice to the people in a country in which a serving senator has as many as seven secretaries, the head of which is paid as much as a sitting Vice-Chancellor of a University? The Federal government has initiated the Subsidy Reinvestment and Empowerment Programme (SURE) headed by Dr Christopher Kolade to make sure that the money accruing from the subsidy removal is devotedly used to develop the country. Like in the days of election campaigns, so many promises have been made. Over night the whole problems of the country have been levelled on fuel subsidy so that once the subsidy has been removed, more than 1400 kilometres of road would be built, including Lagos/Ibadan Expressway and Enugu/Onitsha Expressway, up to 3900 kilometres of railway will be constructed, 3 refineries built within 18 months and old ones rebuilt to 90 percent operation status, maximum employment provided, power reinstalled and price of petrol self regulated with time through competition while

educational, agricultural, economic and health infrastructure will be made available, name them. The government has been pleading with Nigerians to trust her and allow her this one more chance to prove herself. It is good that they understand the weight of the challenge before them. In the first case, the government has promised to partner with both the private sector and the original constructors of the nations refineries in getting our refineries right. Secondly, the government has also promised to be accountable to the people and to involve the civil society in the auditing of the process of reinvesting the accruals from the removal of subsidy. If this board is to be given chance to operate by the Nigerian people, what this means is that the board in charge of the SURE programme will be specific and explicit about the projects carried out at whatever stage and deliver accounts of accruals and their reinvestments to the public on monthly basis. The government must therefore live up to her bidding for once. If they fail Nigeria yet again, there will be no better way of getting things right again in this country. Corruption will be thrown aflame and a civil war may even be the result. This is the opportunity to set records aright. The government should seize this opportunity to close the gap between the rich and the poor. Let the people once more have the courage to believe the government, no matter how undeserved this belief might be. Let the civil society, labour, TUC, activists continue the fight for dialogue and accountability. We thank God that through dialogue, the truce of N97 naira per litre reached at by both the government and organized labour has been accepted by the people. For now, what remains is for the government to make private marketers implement the new fuel price for the good of the people. We pray that this defining point in the history of the Nigerian Socio politics will be a positive juncture for the building of a better future Nigeria for our children. Gabriel Emeasoba is the deputy director, Social Communications, the Catholic diocese of Nnewi. He writes from Nnewi. You can send your comments and clarifications through this address: ucsteveg@yahoo.com