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Olusegun Adeniyi: Buhari and the old woman in Katsina


Olusegun Adeniyi: Buhari and the old woman in Katsina

By Olusegun Adeniyi

“Wata tsohuwa taji matsin rayuwa, kuma sai taji ance bom ya tashi acan da can, ga wahalar mai, Abinci ya na neman gagarar talaka, malamai na kukan ba albashi, don haka yaran ma sai dai suje makaranta suyi wa sa su dawo. Sai ta kirawo babban danta (Auwalu) tace, nasan baza kamin karya ba, Auwalu ka fadamin tsakaninka da Allah, Wai Jonathan ya ba Buhari mulkinna kuwa?”

The foregoing text message (in Hausa) that has been going round among members of the Northern elite in the last one week was said to have originated from Katsina, the home state of President Muhammadu Buhari. And here goes the message: An elderly woman was feeling the challenges of life. She hears that bombs have been going off here and there, fuel queues have returned, food items are becoming expensive and teachers are owed their salaries. She summoned her first son, Auwalu, and said “I know you would not lie to me, Auwalu, so answer me truthfully. Has Jonathan handed over the government to Buhari, or is he still holding on to it?”

Whether the story in the SMS is true or it is made up, its real import is that six months into President Buhari’s administration, there is already a growing sense of foreboding that the security challenge that has for years plagued the nation may be spiraling out of control while the feeling that his government lacks any clear economic direction is fast gaining grounds. Even the talk about fighting corruption is already sounding hollow to many Nigerians since, as a Yoruba adage goes, “eni ebi n pa ko gbo iwasu” (an hungry man would rather have food than listen to any sermon).

President Buhari campaigned on three things: security, anti-corruption and job/economy. Most fair-minded people would agree he has not done badly on the first two but he deserves all the raps he gets on the third, which is clearly not his strong suit and on which many believe he is being unnecessarily doctrinaire. The issue, however, is not his economic bias but whether that bias would not compound what ails us or that it can be implemented and explained by a credible team with clear understanding of the fundamentals of economics. Of course, there are no easy answers and there will be trade-offs and unintended consequences but it is more re-assuring when the citizens and real investors feel that the people in charge know what they are doing.

Unfortunately, recent reports in the international media about the economy of our country are, to put it mildly, not flattering. There are stories of a freeze on commitments by both the local and foreign potential investors and a general air of uncertainties about the economic policy thrust of the current administration. Yet my interactions in recent days with some of the people close to Buhari reveal that while he appreciates the challenges, the president actually has an idea of what he wants to do, and nothing illustrates this than the situation in the downstream sector of the economy. But first, let us situate the story properly.

In 2013, the total volume of PMS brought in by marketers (at least on paper) was 10,217,678,006 litres while the total subsidy payment was N522,665,346,576. For those who may not have temperament for long figures, that can be summarized as 10.2 billion litres for volume and N522.7 billion in subsidy payment for the year. But that does not tell the complete story given components like interest rates and foreign exchange differentials though the 2014 figures explain these better.

The total PMS brought in by marketers in 2014 was 12,276,443,741 litres with subsidy of N444,622,753,752 paid them while a balance of N120,552,317,186 was left outstanding. Those figures also translate into 12.3 billion litres and payment of N444.6 billion with N120.5 billion outstanding. That would attract interest of N51,562,973,868 (about N52 billion) with N20,969,519,683 of that amount paid. At the end, by the time the interest rate and foreign exchange differentials are added, there is a balance of N317,211,472,634 left to be paid marketers for year 2014 supplies. So, if you do simple arithmetic, we would be paying marketers about N830 billion in subsidy for 2014.

For the first nine months of this year, between January and September, the marketers brought in 8,847,731,662 litres (about 8.85 billion litres) with subsidy claims of N292,810,817,319 but were not paid anything, going by the records at the Petroleum Products Pricing Regulatory Agency (PPPRA). That yielded interest of N6,681,101,883 aside other claims like forex differentials which pushed the figure to N323,021,620,111. So by the end of September this year, the total outstanding amount owed the marketers for 33 months (between January 2013 and September 2015) was N642,922,253,878 after the sum of N1,063,811,837,114 (about N1.1 trillion) had been paid. That put the total claim for the 33 months at N1,706,734,090,992 (about N1.71 trillion).

However, it must be understood that the marketers supply only about 50 percent of total national fuel demands (sometimes even less) which means that those figures tell only half the story since the Nigerian National Petroleum Corporation (NNPC) supplies the remaining balance. If we therefore add the subsidy from the NNPC side, we are looking at another N1.71 trillion (making about N3.42 trillion on subsidy) for a period less than three years. Of course we all remember that in year 2011 alone, we, for obvious reasons, spent more than N2 trillion on fuel subsidy!

If we calculate subsidy payments in the last five years, we must have expended more than N8 trillion, just on one single product. Even at the current exchange rate, we are talking of an amount above $40 billion that is practically down the drain because it is perhaps only the people in Lagos and Abuja that buy petrol at the official pump price. Besides, how do we calculate the disruptions in peoples’ lives during fuel scarcity that has become part of the national calendar—the days many spend in fuel station etc.?

Ordinarily, the foregoing makes a compelling case for the immediate termination of the subsidy regime but in speaking with those close to Buhari who provided the figures, they also gave insights that reveal the thinking of the administration. One, removing subsidy without dealing with the rent element and associated issues that have dogged the sector for several years would mean covering all the corruption without learning any lesson. Given prevailing situation, I was made to understand that removal of subsidy would aggravate, rather than ameliorate, existing problems in the sector. What the government is working on is removal of subsidy that is tied to a long-term solution that involves self-sufficiency in refined petroleum products, hopefully within the life of this administration.

Two, it was explained to me that removing subsidy by government fiat would necessarily engender hike in prices not only of transport but also of other essential services as well as commodities and the poor would suffer the most. To that extent, a more seamless process is being worked out bearing in mind the declining price of crude in the international market. Three, removing subsidy without putting a system in place to checkmate the antics of profiteers, I was told, would not guarantee adequate fuel supply and might sooner than later bring us back to Square One. For instance, one big man in the sector whose company recently brought in a large volume of PMS decided not to discharge in anticipation of a higher profit margin (on top of subsidy) until the authorities had to threaten him with sanctions.

The implication of that is obvious: except the cartel that has for years been feeding fat on the misery of the people is dismantled through a systematic manner before removal of subsidy, they would easily game the system as they always do. Four, it is believed that most of the governors are pushing for removal of subsidy so they can have more money to share and for that reason, were it to be done today, Nigerians would not see the benefit of what would hit their pockets. Therefore, the thinking is that it is better to have in place a proper structure that will ensure that the people can see the gains of subsidy removal in practical terms, whenever it is done.

Five, removal of subsidy is tied to some of President Buhari’s anti-corruption reforms in the petroleum sector which has over the years been turned to a slush fund by the presidency. For instance, a total sum of $2.1 billion withdrawn on the pretext of security by the last administration between May 2014 and January this year were from the NNPC accounts, based on some spurious directives to the Group Managing Director of the corporation. Those, I was told, are some of the loopholes that would have to be plugged in what appears a holistic effort at reforming the oil and gas sector.

As much as I understand some of the issues being considered, I believe that the Buhari administration should put them in the public domain so we can have a proper debate on the way forward. What I find more surprising is that, in the plan of the president for the economy—from road infrastructure to power to the refineries, the private sector will play a very critical role, especially considering the idea of launching an Infrastructural Fund to finance key projects on a long term basis as opposed to budget-cycle financing. Yet that is difficult to decipher from his “body language” which is all that Nigerians have had to rely on in the last six months since he would not speak to us. In fact, the only times the president speaks are when he is outside the country which in itself has brought about a joke being circulated which reads: “Breaking news: President Buhari to visit Nigeria on Wednesday December 2. No indication of how long he will stay.”

It is perhaps in response to that joke that Senior Special Assistant to the President on Media and Publicity, Mallam Garba Shehu, intervened last weekend in an opinion piece titled, “Buhari’s trips are not for enjoyment”. But there is a message he himself perhaps didn’t get from what he wrote: “In public diplomacy, experts say that it is better conducted through face-to-face interaction than through third parties…” The inference from that is simple: Nigerians want to know, and indeed deserve to know, what Buhari is doing about the economy and they want to hear it from him. As it would happen, he is not telling us anything so everybody is relying on his body language and giving it his/her own interpretation.

Given the good governance deficit in the land, Nigerians are desirous of serious action and quick-wins. They want a sure-footed president, one who is not afraid of making mistakes and desirous of making impact quickly. Having spent the last six months putting together his team, Nigerians are eagerly waiting for them to begin to deliver. But there is no sign of that yet since the ministers are also not telling Nigerians anything about the direction of the administration perhaps because, like the rest of us, they are waiting for the president’s body language!

While I agree that the trips the president has had to undertake in recent months are important, time has come for Buhari to stay home, rally his troops, speak to those who gave him their mandate to be president over their affairs and begin the difficult task of leading our country to peace and prosperity. If we, as journalists in Nigeria, would have to be quoting foreign media on critical pronouncements of the president, then something is wrong.

More importantly, the presidential system that we have adopted from the United States of America thrives mostly on communication. President Buhari must therefore talk to us; he must touch and be touched by that old lady in Katsina; he must go into Aba or Onitsha market as a gesture to defuse the fake Biafra protests that have become a lucrative enterprise for, and being fuelled, by some people; he must undertake a sudden visit to the strategic Apapa port in Lagos to personally experience the chaos; he must visit the IDP camp in Maiduguri to carry some babies in his arms; he must come out openly to assure the ‘Sugabellys’ of our country that rape is a heinous crime and that culprits, no matter who their fathers are, would answer to the law etc.

What President Buhari and his handlers must know is that body language politics belongs to the age of medieval kings and overlords. Nigeria did not elect an inscrutable monarch but a popular president. Buhari must therefore quickly strike a balance between his personal aloof and inscrutable mien and the robustness of the Nigerian national character. We are a sunshine people, even in the face of odds and hardship. Once you tell us why we have to sacrifice, we can make adjustments. But if you ignore us, frown at us or turn your back at us, we feel hurt and begin to take a close look at the king’s costume. And the consequences can be very dire.

The core policy challenges today remain the fuel subsidy regime and foreign exchange restrictions and control. Whether or not President Buhari is seen by local and international private sector people as business friendly will depend on what he does with both. However, the best way to show gratitude to the common man is not to fumigate them with “cheap” gasoline that is hardly ever available at the official pump price or float a dual exchange rate regime where somebody can make a “profit” of N40 Naira or more on $1 without engaging in any productive activity.

Even when the economic problems that Nigerians now grapple with were not created by this administration and might be deeper than he anticipated while campaigning for votes, President Buhari promised ‎to fix them once elected. It is therefore not unreasonable to expect that he would act with more dispatch, sure-footedness, clarity and open communication. If the president persists on his current course, we may soon be witnessing a harvest of separatist protests, labour unrest and private sector indifference. And should that happen, the vested interest in the corruption edifice that he is trying to dismantle will ensure his nights are sleepless.

All said, the imperative of the moment is to create an environment in which investment flows in to complement local effort so we can clear the streets of miscreants and potential criminals and put the people to work.

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