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10 days into new Govts in Nigeria: What is the state of the Nation [Opinion]
…..I will never support or accept the withdrawal of fuel subsidy in Nigeria
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By Dr Orefo Nnamdi Onochie
Why is it not possible to stick to the tradition of assessing new governments only after 100-days? A new Nigerian Federal Presidential Administration, and 18-State Governments were sworn in about 10-days ago, and Nigeria is scampering to assess the instant state of the nation. Why, why not wait and grant a little more time, to enable more data to be available?
Nigeria cannot, and will not afford such luxury. The country was truly on the brink, as the Buhari Government was leaving. Rather than slow down, that government with all its failures, flaws and pleas for the forgiveness of the populace, became even more reckless, commissioning projects that were half executed, seeking huge dollar denominated loans for only what programs they contrived, deceiving the Nigerians and the world that it achieved a lot, yet not hiding that it was more than ready to leave and go into the unkind recesses of history and popular judgement. At the various State levels, it was nearly the same characteristics, except that it was all more a clear testimony of the gross failures of governance from 2015-2023, more so in governments largely of the APC, and some remarkable ones in the PDP where salaries of workers and pensioners were being owed for several months and in the millions. The centre government failed to lead by example, criminal corruption, cronyism, theft of huge treasury monies, oil and gas fraud, and political recklessness, and religious-ethnic banditry, reduced Nigeria, to an appalling, pitiable collapse: Nigeria had never known it so bad: the longer the country continues in these charade, the most difficult it will be for the populace.
The brigandage of the results of the 2023 Presidential election, set off a tangent of pity and collapse, that culminated in the near total destruction of the electoral platform of Nigeria, through ethnic violence, profiling and the adumbration of the elections of 18-governors, and the re-direction of political change, openly and keenly sought by the youths, for a new and better Nigeria.
This was the tinder-box state of the country, in which the governments with tenure ends, were publicly begging to leave. There were guesstimates that the Federal Presidency would not be inaugurated or consummated, with sharp legal tussles of disqualifications, one day to May 29, 2023, Inauguration Day.
INAUGURATION DAY AND REMOVAL OF PETROL SUBSIDY
But unbeknownst to millions of gullible Nigerians, with minimal publicity, on Thursday, May 24, 2023, the outgoing Buhari Government bestowed the highest civil military gallantry honors on Bola Ahmed Tinubu, BAT, the GCFR, Grand Commander of the Federal Republic, effectively handing over to him, the commanding honor to lead the Nigerian Military, and to have the highest standing in national Protocol: Kashim Shettima, his Vice, was granted the next in rank, GCON, Grand Commander of the Order of the Niger. With those honors, the swearing-in ceremonies, were mere formalities, and there was no stopping the hand-over of Government, in spite of the contrary wishes of millions of Nigerians that the legal tussles in the Presidential Tribunal, and the Supreme Court of Nigeria, should be concluded, before the handing over.
At the Presidential inauguration ceremony, on the morning of May 29, 2023, Nigerians were shocked as the pronouncement was made, by the newly sworn President, that petrol subsidy had been removed: it was not a policy to be proclaimed before being implemented, it was a decision already taken, and being implemented.
About 9 days to Buhari’s end of tenure, it had been announced that the incoming Administration at the centre, would be saddled with the fuel subsidy removal decision. A whopping sum of N600 Billion Naira monthly payments were made towards subsidising the cost of petrol in Nigeria. If not made, per liter cost of petrol could triple. For more than a decade, removal of fuel subsidy had been the most egregious decision confronting governments in Nigeria. At some point, the Buhari Government position was that no such subsidy existed. Subsequently, payments on fuel subsidy became a subject of blackmail between the government and major oil marketers within Nigeria; and in the 8-year period of the Buhari era Nigeria had spent more than N6 Trillion Naira, or $3.7 Billion USD on fuel subsidy, and in 2023 alone. The question is, why the triple haste to remove fuel subsidy?
RIPPLE EFFECT ON THE ECONOMY AND COST OF LIVING IN NIGERIA
Apart from the evil effects of elite culpability and corruption in the subsidy imbroglio, the damnedest effect if fuel subsidy was removed, would be its ripple effect on the economy, especially the cost of living and inflation. Modest lessons were always learned any time there was scarcity of petrol, or peremptory adjustments in the price of petrol, the ensuing gallop in price increases of other commodities or products/services, would be so damning that no one would imagine what the effect would be if a global subsidy removal decision were to be made, just as a new Government was being sworn in. Such was the shock that initially there were doubts that at his inauguration as President, BAT would accept that his government would be able to grapple with the consequences such a policy decision would be on Day 1.
The jolt raised a stampede and frenzy, that in less than 12-hours, the price of petrol more than doubled in most major cities in the country. Due to the long holiday weekend, thousands of travelers were stranded and exposed to long queues at fuel stations, very high stresses from frenzied buying due to the artificially induced scarcity. Even with the historicity of bad governance in Nigeria, such a novel situation had never happened, at the beginning of a new government: it was like the Christian mythology of Solomon’s sons Jeroboam and Roboam, “if my Father chastised you with canes, I will chastise you with scorpions”. The subsidy removal added to the general sense of loss and failure of the Buhari 8-years, a renewed sense of trepidation and uncertainty that Nigeria had again fallen into the hands of the fraudulent, which in local parlance is known as “one chance”, who could frisk you and leave you to suffer more in the hands of new more frightful rogues: to be trusted and to win the Presidential election in 2015, Buhari forcefully posited that there was no petrol subsidy, and that as President he would level the forex value of the Naira against the US Dollar, and reduce the cost of pump price petrol, which was a policy pursued by Umaru Yar’Adua, predecessor to Goodluck Jonathan. Indeed, the so-called Progressives political phalange in Nigeria orchestrated demonstrations at Ojota, Lagos, against Goodluck Jonathan in January 2012, nearly akin to a coup d’etat, that culminated in the stoppage and cessation of the increase in petrol pump price by that government. It was a massive roll out of Military Force by the Nigerian Army that dispersed the thousands of demonstrators in Ojota. In that instance Bola Ahmed Tinubu openly instigated and became the conscience of those opposed to increasing the price of petrol, which is the same as SUBSIDY REMOVAL.
Upon becoming President in 2015, Buhari who aligned with BAT, and was funded by BAT and Rotimi Amechi’s newPDP Group, discovered that petrol subsidy existed, began to approve, spend it and appositely hiked the price of petrol eventually up to N230.00 per liter. The change from protector of the petrol stable, to the DAMAGER of the stable economic environment of Nigeria, remained a permanent feature of the government of Buhari and the APC elite. On May 29, 2023, Tinubu joined, and the plank he Tinubu set up against Goodluck Jonathan, he has now straggled on, and the gradual process will totally change the face of Nigeria economically and eventually her politics.
Within 10-days, here are the early consequences.
REDUCTION IN WORK-WEEK, RECESSION AND PRODUCTION CAPACITY OF NIGERIA
First it was Kwara State, followed in tow by Edo State, that authorized its government workers to now go to work, 3-times in a week. In the history of countries colonized by the British, the practice has remained 5-work days in a week. Surely more States will follow, and cut down production work time for Government services. Since it is expected that the cost of transportation will be hiked, savings will accrue to workers as they only head to work thrice in a week.
HIKING MONTHLY MINIMUM WAGE TO N200,000.00
Early reports credited to Tinubu’s insiders was that monthly minimum wage in Nigeria, would be reviewed to N200,000.00 (Two Hundred Thousand Naira), nearly 500% increase, from the current monthly minimum wage of N35,000.00, which cannot be paid by more than half the States in the country; this current monthly minimum wage has been openly opposed and been rejected by private businesses, and small-medium scale employers. Another uncertainty and disruption in the wage scale of Nigeria. Where will the funds for these increases in monthly minimum wage come from? Is it at the same time, as the work and productive week of the government employees is being reduced from 5-work days to three? What is the policy justification for these ruinous policies of a government not quite a forth-night old? How can this be a blessing to Nigeria?
CALCULATING THE ECONOMIC COST AND MONETARY LOSS OF REMOVING FUEL SUBSIDY
The tragedy of governing Nigeria in the past 2-decades, during which the flirtation to remove fuel subsidy has festered, is that not a single articulated public study has been commissioned by Governments, as a bull-work and framework to contradict the clamor to remove fuel subsidy. It is impossible to find organized media that openly opposes eradicating fuel subsidy. Even the organized private sector, OPS, has joined the chorus of propaganda railed against maintaining the current cost of petrol, not to imagine propagating a policy of reducing drastically the cost of petrol in the entire economy, which I have done in the past two years, as a Presidential Aspirant, and intellectual. But it is possible to graphically and mathematically List the financial losses that this policy will engender in Nigeria. To fully grasp the magnitude of the losses, it is necessary to begin from calculating the annual government ascribed and budgeted cost of subsidy paid for imported or distributed petrol. Zainab Ahmed, the penultimate Finance Minister to Buhari pronounced a wapping monthly N3.6 Billion Naira cost, said to be unsustainable. Mathematically, removing that sum to sustain petrol usage means that the sum is transferred to petrol users as cost, in addition to the difference created as a result of the newly increased pump price, which as at June 10, 2023, is ranging from N520.00 per litre, to N710.00, in petrol stations further away from downtown centers. Calculated monthly monetary loss from N210.00 and summed up as N3.6 Billion Naira monthly by Zainab Ahmed, plus the new per litre addition, that will hike the subsidy to N150 Billion Naira per month, as from June 10, 2023 onwards: this is only the rise in the cost of petrol as a sector. Extrapolate these mathematical numeration to 15-subsections of the Nigerian economy (or any other economy elsewhere), and the magnitude of these losses will become more glaring. What will be the policy justifications for engaging in subterfuges of this magnitude by any government? It is absolutely not commendable, feasible or necessary: the adverse cost and losses defeat any anticipated gains that may be said to be acruable to any other sector(s) of the economy. The dislocations and disruptions alone, to the stability and clarity needed to progressively direct the economy and polity; this completely disqualifies such policy suggestions, not to mention implementation.
PROGNOSIS
FOR BAT
There is no way, the current policy will come out successfully for Nigeria: it is yet too early, to calculate all the already aligning losses. How would investing N3.6 Billion Naira monthly write off galloping higher cost of living of citizens on a GDP calculus of more than N8.2 Billion Naira monthly? Which is higher, the former or the latter amount? It is the latter, and the sooner this is the direct policy of government, the faster it will take to redeem the nation’s economic fabric.
IMPACT OF REDUCED COST OF PETROL VERSUS RUNAWAY INFLATION
It is only in Nigeria that the government is never bothered about rising cost of living. Why? It is because there are no elections in Nigeria and/or that the politicians rig the elections. Voter sentiment is never a factor in the lifespan of the government. Apart from the 2015 loss of the Presidential election by Goodluck Jonathan, no other election in Nigeria has been based on the actual votes of the citizens.
The 2023 Presidential election was the most bizarre, because the electorate openly and forthrightly rejected the APC for all the problems it’s unguided governance placed Nigeria. In addition to the inflation rate of more than 1,300% on most commodities and services since 2015, not excluding the devaluation of the Naira (from N230.00 -N760.00 per $1.00 USD; 530 percentage points devaluation, yet no sense of failure is shown or acceptance of culpable recklessness); insecurity and Separatism (multiple itinerant violent outfits, Boko Haram, ISWAP, Bandits, Fulani herdsmen, Niger Delta militants/Republic, IPOB-MASSOB Biafra, Yoruba Nation, Middle Belt Republic, Arewa Republic, Anioma Republic etc); official corruption, cronyism, religious and ethnic bigotry, the APC scorecard was such that Nigerians were fully prepared and rejected the APC’s candidates nationwide. But the manipulations of the highest ranked INEC, Independent National Electoral Commission, officials rigged the Presidential election of February 25, 2023, and the subsequent Governorship elections in several States and denied voting rights to millions of profiled Igbos and others who resemble Igbos). Should the Election Tribunals, especially the Presidential Tribunal and the Supreme Court of Nigeria, render irrational unmerited judgements, the reactions of the populace or the extent that the volatile disaffection will reach, is utterly unpredictable. Yet, this appears to be the ultimate threshold: the burden that may break the back of the camel.
It is apparent that there is no quantity of saved money that will be equivalent to the disruptions, dislocations and loss of base incomes, degraded assets, lost opportunities, as against the overall subsidy payments, including official/unofficial corrupt enrichment emanating from falsely claimed subsidies. There are new unofficial claims that daily petrol usage in Nigeria since the revocation of subsidy 29/05/2023, has been reduced from 63,000 MT to 13,000 MT. These figures are propaganda, fused with the subsidy removal saga: how did this new figure of national petrol usage emerge in less than seven days, who conducted the study, in order to lend it credibility? Reports of disaffection and demonstrations against the subsidy removal in North east Cameroon, meaning that it is the border all French-speaking neighbors of Nigeria who benefit from and swallow up the excessive quantities of petrol that comes cheaper from Nigeria. Indeed, it is in the nature of capitalism. Where the economics is cheaper, that is the favored environment, but you protect your own grounds: not by stifling or closing the borders, but by pursuing firm liberal economic policies; open Rule of Law prosecution of corrupt Government, especially Customs and Excise officials, based on zero corruption policy of the government.
CASE POLICY ASSESSMENTS
Petrol is cheaper in Tijuana, Mexico, than it is in San Diego, California, USA. Pharmaceutical drugs are cheaper in the same not highly developed border town Tijuana, than in San Diego. The fact of these economic situations, is not a compulsion for the US or California policies to be reversed, as a PUNISHMENT for its citizens. The consequences of removing petrol subsidy is a policy of economic punishment for NIGERIAN citizens. Impact and ramifications from that policy will spiral into higher costs that will further cause social upheavals that will pale the gains from the so-called financial gains from the new adjusted punishing non-subsidized prices. Over a medium-term time frame, prices of all other products and services will skyrocket and wipe out the acclaimed gains of subsidy removal. Foods, accommodation, intracity or interstate transportation, all will be affected by galloping inflation, with a significant effect on the quality of life of the citizens.
Inflation and rising cost of living is still the most important policy sphere that confronts all governments today, and will sustain or cause the demise and fall of the inattentive, insensitive and reckless government. In the year 2022, the Conservative Government of Liz Fuss, suffered highly damaging and disgraceful exit, from the recklessness of the Boris Johnson policies, that instigated inflation from 8% to 14%, which enumbrated and caused a stampede in financial, housing and mortgage markets in the UK and beyond. In less than two weeks, the government of Liz Fuss was replaced by Rishi Sunak: the Parliamentary system, much more sensitive to political recklessness, than the Presidential system in practice in Nigeria, prevents long term damage to the economy. In the case of Nigeria, the recklessness of the incipient policies of the new Tinubu Government will lead to an already obvious economic recession, of the type Nigeria suffered when Buhari took over in 2015. Governments are shortening and reducing the working week to three days, increasing minimum wage, from N35, 000.00, some to N40,000.00, and the Federal government rumored to N200,000.00 increase, further aggravating costs and ballooning the drain on treasury available funds. Workers are producing less, being paid more, and prices of goods are rising; where will this net funding come from?
The answer is ways and means, not backed up by increased productivity, and work man-hours, which is a recipe for hyper inflation, a recession and inevitable downturn of the economy. The combination of the Buhari Naira redesign policy, and the new Tinubu hyper inflation removal of fuel subsidy, will leave Nigeria in a bursting recession that the economy cannot recover from until 4th Quarter 2025. The national confusion will exacerbate criminal dispositions and conduct, and kidnapping, political violence and social vices will increase astronomically. The computation of the fiscal and monetary costs of these new traps that the country is falling into, is greater than the profit from the removal of fuel subsidy. Here is the other side of the same coin for Nigeria.
REDUCING THE COST OF PETROL TO N75.00 PER LITRE
Whereas the huge instigation is at removing fuel subsidy, economic policy makers and analysts in Nigeria, have refused to see redemption in reducing the liter price of petrol. Maintaining the price of petrol prior subsidy removal invoked cries of corruption and the father-christmas attribute to Nigeria’s French speaking neighbors. Computing the financial figures which seemed lost, appeared to easily increase the assumption that directing such funds to other services such as education, housing, roads, bridges, loans to businesses etc will serve the greater interests of the country. The punishment, inflation and reduced quality of life quotient is entirely over-looked and discarded. Why is this so, and little regard is placed on the negative impact? More tragic is the policy emphasis on palliatives, which is designed to offer very meagre infinitesimal cushion of N5,000.00 (Five Thousand Naira), monthly allowance to “10 million” Nigerians, in a country of guesstimated 200 million citizens. Sometimes, it is wondered how well civil servants in Nigeria today make contributory written assessments and examinations of government policies in our instant polity. What percentage is N5,000.00 to an inflation rate that is 22.5% of the monthly expenses of a minimum wage income family of N40,000,00 now offered by the Edo State
Government?
Conjectured that the rate of inflation on N40,000.00 earned minimum wage, additional N22,000.00 is needed for the palliative to be efficacious: that is to say that the envisaged palliative to 10 million Nigerians must be N27,000.00 Naira each, instead of N5,000.00.
The Federal Government has offered N5,000.00 to only 10 million persons: where and how will the remaining 190 million Nigerians find succour, comfort and reliance? The avenues are corruption by public servants, Police and other security agencies such as Customs, Soldiers, EFCC and ICPC Staff, Judicial and Court services staff, yahoo-yahoo youths, male and female: the count is endless.
In effect, if Petrol price per liter is reduced, within Nigeria the cost of transportation will be positively impacted, reduction in prices of goods, foods, accommodation etc will be compelled by a Government inspired and instigated RoundTable, and insistence that prices are to be reduced by a first instance 35%. Other scheduled reduction templates and stages can be programmed also. Whereas the cost of reduced per liter petrol will involve quadrupled expenses by government, all the negative attributes that emanated in computing subsidy removal will be absent, eliminated and inconsequential. It is in this light that I have offered this policy solution to Nigeria, as first a 2023 PDP, and later a PRP Presidential Aspirant, from 2021-2023. Even the Nigeria Labour Congress, NLC, and the Trade Union Congress, TUC, and ASUU, the all universities unions, all collectively now engaged in sellout negotiations with the government; they have shown themselves to be selfish agents of retrogression and suffering for Nigerian citizens ( see the empty options they accepted, to postpone the Strike action of June 7, 2023, against subsidy removal, options that have no substance or relevance towards affecting the cost of living in Nigeria).
PROGNOSIS FOR THE MEDIUM TERM: GODWIN EMEFIELE ARRESTED FOR ALLEGED N89 TRILLION NAIRA LOOTING
There is no hope or redemption in sight, and things will certainly get worse for and in Nigeria. Our prognosis is very bad, and there are yet other factors such as the value of the Naira, in exchange for other stronger foreign currencies and monies, such as the US Dollar. Petrol is expected to sell at N750.00 per liter by August 2023; what will be the exchange rate value between the Naira and US Dollar by same August 2023? How will the Tinubu Government proceed, with the exchange rate value and policies on monetary economics? Scion of a trading business family, how friendly will the policies of the Tinubu government be towards this sector? Following the 2023 Presidential campaign platform, the Tinubu Government’s policies in these sectors will not be too different from the Buhari policies: Emefiele now detained was a generator of monetary policies wholly accepted by the Buhari government. Why arrest Emefiele, what will be the fate of all the other members of the CBN Governing Board, and the Federal Finance officials, and what will the new direction and policy be? EFCC need to disabuse the thinking of citizens that only Emefiele stole N89 Trillion Naira, and no other cohort can be traced: it does not happen in Nigeria.
The CBN , Central Bank of Nigeria, Governor, Godwin Emefiele, has already been arrested allegedly for “looting” N89 Trillion Naira, and Ex-Governors Matawalle and Fayemi of Zamfarra and Ekiti States respectively, are being investigated or audited. Are these the harbinger of “more heads will roll”, and what will be it’s effect and consequences on the policy-making capacity of the Tinubu Government?
Even as the Dangote Refinery, Lekki, Lagos, begins selling petrol to the NIGERIAN market August 2023, from the business history of the Dangote Group, it will not sell petrol below the current Nigerian prevailing market price, so there will be no alleviation, yet the Refinery was built by forex subsidy of the Nigerian Treasury.
The other factor that confronts Nigeria in the medium term is insecurity and agitations to re-structure Nigeria, or dissolve it as a political union. What will the Tinubu Government instigate and inspire? The litigation contests in the 2023 Presidential Election Tribunals, PET, and the Supreme Court of Nigeria, no matter the direction of their Judgements, how would these impact on the Tinubu policy making framework? Will it be akin to the Abacha and Buhari models, the harsher Nigerians regard them, the greater the punishment of the general citizens? Unless the Tinubu Government wholesomely accepts to restructure Nigeria before end of 3rd Quarter 2023, the forces of ethno-religious violence, instigated by the Muslim-Muslim 2023 Presidential ticket, the profiling and suppression of the Igbo votes in Lagos in the February-March 2023 General elections, not excluding the Nasir el-Rufai pronouncements on an invisible Hausa-Fulani-Northern Agreement with Muslim Yoruba elements, the rigors of separatism in Nigeria will stringently test the Tinubu Government capacity to calm and progressive waters. The wiser counsel is to begin restructuring NOW, and not fall into Goodluck Jonathan’s illusion of 2014, that the easier time is in the future: Nigeria is a tinderbox!
I WILL NEVER ACCEPT OR SUPPORT THE WITHDRAWAL OF FUEL SUBSIDY IN NIGERIA- DR. OREFO NNAMDI ONOCHIE
As a retired Nigerian diplomat, who is fluent in French, Spanish, Yoruba, Hausa and Igbo, I know enough to advise myself and Nigeria that there is no better time than now, not to be reckless in economic policy-making. Every country decides what its subsidy must be: different strokes for different folks. In Central Europe, now classed as the EU, tampering with subsidies on agricultural and fisheries products means inflation will be a death-kneel of that government. In most Arab countries, the high cost of bread, and high cost of foods, will bring a revolution, if the costs get higher. In USA, vast in territories and dedicated to remaining a continent country, petrol or any energy resource for cheap traveling attracts a permanent SUBSIDY that is non negotiable: when the resource is very cheap, it is stockpiled into a Strategic Reserve, and released once the price gets high, and no one is charged for the subsidy most benefitted from by the oil companies. It is not corruption, it is a palliative of Government and cannot be tampered with.
My listing is sufficient to make me conclude that the central issues here relate directly and unambiguously to keeping a very tight lid on inflation. Thus, any policy prescription that may increase the rate of inflation and the cost of living in Nigeria will not be supported by me: foods, transportation and accommodation must remain very cheap for all the citizens of Nigeria. This we must watch with the eyes of an EAGLE, and ponder with a resolute turn of the head, each time, to ensure that we do not become fogged or confused, and engage in recklessness that will stop us from that track of unity and prosperity of the fair, just, equitable and noble. Any other pathway on this by any politician is perfidious and will lead to political disgrace and apologies, the like of which Buhari persisted in with Nigerians before retiring to Daura. To be forewarned, is to be better prepared!
Dr Orefo Nnamdi Onochie, Chairman/Convener
NACOPPIN NIGERIA 2023, wrote this piece.
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