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Abimbola Adelakun: The return of Nigeria’s subsidy debate

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Abimbola Adelakun: The return of Nigeria’s subsidy debate

By Abimbola Adelakun

The question of whether “subsidy” paid by the government of Nigeria on imported petroleum products needs to be expunged or not is being sneaked back into public discourses. The dialogue is inevitable for various reasons; the major one being that Nigeria can barely afford to continue to indulge incompetence as has been done in the past. When times are hard as this, it requires all of us to make sacrifices.

The price of oil has not only taken a plunge, Nigeria’s decades of imprudent spending and free-for-all looting are taking a toll on the nation’s financial health. Presently, a number of states cannot pay salaries let alone carry out capital projects; public and private institutions are feeling the impact of the cash crunch as it gradually cripples their activities. Unless crude oil price shoots up overnight, there is an implacable crisis due Nigeria.

In the wake of the last energy crisis that struck Nigeria, the debate on subsidy is reawakened and those who previously stood against its removal now urge the new President, Muhammadu Buhari, to do away with it. There is no official proclamation on this yet but there is a possibility he might agree, he himself having confessed he has no idea what fuel subsidy means. Those of us who have considered the illogicality of the figures touted as subsidy cost cannot help but agree with him that what constitutes the phantom subsidy is more of fraud. The amount continues to ginormously swell with the ignominious corruption that underwrites the whole affair.

One of the subplots of the forthcoming arguments on the subsidy removal would be the All Progressives Congress’ volte-face on its previous stance.

In 2012, when the Goodluck Jonathan administration attempted a total removal of the subsidy, the APC (then the ACN) capitalised on the wave of anger cresting against his government to rave, describing the exercise as a “great misadventure.”

The shoddiness with which the government was going about such a major move did not help matters.

The premise they were basing their policy, I noted then, looked good on paper like ideas crafted by detached theorists are wont to be but what were they not telling Nigerians? The argument was that fuel subsidy costs the government a whopping $8bn per annum; a 300 per cent increase from just months back and the sum could go higher. They argued that removing the subsidy would free up money for Nigeria to spend on projects such as reducing maternal mortality, road and rail transport infrastructure and employment generation. The problem with such promises was that the Jonathan government could not be trusted to hold up its end of the bargain and Nigerians, understandably, revolted.

Again, there was the issue of timing – the policy announcement date was January 1 – and as it turned out, the government had no plans to make social safety nets for those most affected by the multiplier effect of the subsidy removal. While the controversy was raging, there was a hasty promise of 1,600 buses waiting to be deployed to alleviate the effect of the high cost of transport resulting from price increases. The Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, in an interview with Al-Jazeera, did claim that 1,100 of the buses were operational. How those buses were distributed around the country, and who rode in them, are anybody’s guesses.

The government made a compromise caveat SURE-P, a hurried palliative meant to assuage the raw and raging feelings of Nigerians most crushed by its policy. Our lawmakers, cottoning on, instituted a probe of the whole affair and those who cared to follow it up were entertained by sordid revelations of transactions in Nigeria’s energy industry. One wonders what became of the Farouk Lawan probe committee. How many people were jailed and how much money was retrieved from the looters? Lawan himself became a joker after he was accused of accepting bribes from those he investigated. The whole subterfuge petered out like a cheap TV drama. The ex-president, as is his wont, later initiated a committee headed by Mallam Nuhu Ribadu to probe the subsidy (or the semblance of it). For almost three years, the report has been accumulating dust somewhere.

Some three and a half years after Jonathan’s half removal of subsidy, we are back to where we started except of course, this time, the debate is not quite the same. The context has changed, the actors are not the same and the political baggage is not as heavy -yet. Whatever we do this time as regards subsidy must follow a different trajectory. Most of the submissions I have read advocating the removal of subsidy are planked on Buhari’s moral fortitude: That he has the balls to tackle the corruption in the energy sector unlike his predecessor and if he promises to expend the money allocated to subsidy on infrastructure and capital projects, we can bank on his word.

There are indeed fair reasons to have good faith in Buhari. He has a reputation for honesty and he has worked in the oil industry before; first as the Chairman of the Nigerian National Petroleum Corporation and as PTF Chairman. If there is someone who should know what he is doing, it should be him.

However, Buhari should earn Nigerians trust; it should not simply be bequeathed. One can say this presidency is his first outing after a long hiatus from public administration. It should not be taken for granted that taking a major step like total removal of subsidy will result in anything different from what Jonathan’s government promised. Equally importantly, how does he cushion the effects for the more vulnerable population?

If he says he will rehabilitate the physical and intangible structures that have handicapped the NNPC, for instance, his ability to do so should not simply be presumed, it should be convincing. If he says he will confront the corruption in the oil industry, we should let him roll out his plans and gauge them for their potential. As of now, he has yet to announce his cabinet, articulate a convincing anti-corruption plan nor shared his comprehensive economic recovery plans. We should at least see the direction he plans to shepherd the nation, otherwise, what would be the point of the recalcitrance against a similar move in the past?

Nigeria is currently reeling economically and it will take a lot of imagination to claw her out of this quagmire. The country not only needs leaders who are sound of mind, intellect and far-sighted but those, while working towards a grand economic plan, would not lose the poor and the weak nor abandon them to economic forces. The question now is about timing. Should we then wait for perfect conditions before making that move against subsidy? I say not necessarily. If Buhari sets the course, and demonstrates the willingness to follow the path, then he has already met us half way. We can take the rest based on faith backed of course, with vigilance.

– This Best Outside Opinion was written by Abimbola Adelakun /Punch

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