On JANUARY 10, 2012, I read an interesting post on facebook. I have quite forgotten the author but the comment reads “If President Jonathan was a bad leader as some people want Nigerians to believe, he would have done just one thing – revoke the import licenses of petrol and give them back to people of the South-South and the South-East. But the President did not do that because he wants the nation’s resources to be used for job creation, delivery of basic social services such as health, education and potable water as well as the provision of infrastructure for the betterment of all Nigerians.”
Impressed by the person’s logical reasoning, I also made a short but pungent post – why past leaders subsidized a war economy in Nigeria. Granted that Nigeria has fought only one civil war, but the political economy has floundered in such a way as to suggest that Nigeria has been running a war economy for the past three decades or so and most Nigerians appear to be comfortable with the incrementalism of governance without fundamental transformation in the system. I addition I said, why will Nigerians not trust President Jonathan with re-investing the subsidy money to empower the ordinary Nigerian. During the electioneering campaigns
Earlier, THEWILL’s 2009 inaugural edition story titled: “Cartels behind Nigeria’s Continued Oil Imports. “a United States Secret cable from its embassy in Nigeria published by Wikileaks alerted of the scam and fraud in the importation of petrol orchestrated by foreign dealers with the support of rogue government officials in the NNPC and customs. The cable supports the revelation the scam has cost the Nigerian taxpayers trillions of naira over many years and untold hardship. Several senior government personnel have looked the other way and at most times aided the scam, while these vultures devoured our common wealth for their personal well-being in the name of fuel subsidy. Rumours making the rounds also have it that the reason for the January 1, 2011 decision was a preemptive strike unleashed by the President to forestall an alleged N50billion bribe of the NASS by some Independent Markerters to soft peddle on the issue of subsidy removal. While we may con test the veracity of the report, it can hardly be wished away because of the quantum of money at the disposal of the Marketers and their penchant to entrench the subsidy regime and its attendant opportunistic, hawkish predatory and corruption patronage network.
Since the subsidy imbroglio started, we have seen so many enemies of democracy and good governance. The pleasant truth is that it is common knowledge that the Nigerian government, for the past three decades of so has been subsidizing inefficiency and waste and those benefiting from the evil scam of importing petrol are the billionaires who are holding the nation in its jugular. Under the guise of anti-fuel subsidy removal protests, some Nigerians (even highly placed Nigerians including some ecclesiastical pretenders wearing the hood) called for the overthrow of a democratically elected government. Some of the protesters wore the garb of ethnicity and religion while others saw the crisis as a window to destroy the administration- and in most cases; they rode on the crest of political adventurism and economic opportunism.
The World Bank had since published that Nigeria failed since 2006. A failed State is neither a pariah nor a fragile State but the characteristics are similar. Politically, Nigeria has weak political and administrative institutions and often a political system that is non- participatory. In its place what you observe is a vigorous competition for power at the expense of governing hence any party in power is deemed to have limited legitimacy. This largely arises from lack of consensus building and the deliberate undermining of the rule of law.
Economically, a failed State is characterized by extensive damage to or decay of economic and social infrastructure, high levels of indebtedness and usually unsustainably high defense budgets. Because such economies are peripheral and mono-cultural, there exists some significant contraction of legal economy and expansion of illegal economy. In Nigeria, it is this phenomenon that inadvertently promotes criminality and undermines the formal economy. Since the integral part of the populace is excluded from the formal economy, some people revert to subsistence a activity which inadvertently brings about conflicts over ownership of and access to land. Gender imbalance and environmental degradation are also poverty indicators that weaken the fabric of society.
A failed State is also characterized by a bloated security forces; armed opposition as well as paramilitary forces. The need for each ethnic nationality to protect itself also leads to the proliferation of light weapons, which fuel inter-ethnic crisis. There is lack of transparency in security affairs and accountability to civil authorities and to population. Human rights are often flagrantly abused. In all ramifications, Nigeria is a failed State and for upwards of three decades, Nigeria has been running a war economy. Nigeria has manifested all the symptoms of failure in power supply, education, health care delivery services, roads and other basic infrastructure. Nigeria’s war economy may continue for a long time until our leaders pay serious attention to developmental issues. But is Nigeria not running a war economy?.
A war economy is one in which rational economic calculations do not work because legal and illegal activities are carried out with impunity. It is an economy in which a huge segment of the populace is deliberately dis-empowered by the ruling class, and resources are spent to undermine the ability of opposition groups who may wish to emphasis transparency and accountability in governance as against official stealing and pervasive corruption and systematic looting. A war economy operates where there is a legal vacuum forcing the people to adopt coping strategies of survival of the fittest. In nations that run war economies, all manner of illicit businesses are carried out; there is pervasive insecurity hence life expectancy rate is very short and this is often exacerbated by the inability of conventional law enforcement agencies to maintain basic security, law and order. Such nations operate economies that suffer from dependency syndrome hence they are vulnerable to the shocks that are attendant to neo-imperialism.
Analysis of these characteristics shows that Nigeria is a failed state that is running a war economy even though we are not fighting external aggressors. In Nigeria, the formal economy has been destroyed by the growth of black-market, which thrives on predation, pillaging, extortion and violence against the weak. That is why drug trafficking, oil bunkering and pen robbery are “ring fenced” in such a manner as to create room for profiteering to thrive against the conventional logic of capitalism. Under such harsh realities, there has emerged a neo-oppressive class labeled “conflict entrepreneurs” who reap benefits from the emerging crisis to engage in empire-building through engagement in all manner of illicit businesses.
Nigeria is indeed a failing state where the provision of basic infrastructure is not considered as government priority. Money budgeted for the provision of power supply is criminally diverted into individual pockets. Lack of power supply constitutes a major reason why private businesses cannot thrive. As if we are running a war economy, most of the companies that were doing business in Nigeria have either wound up or forced to close shop because of the harsh economy or activities of militants. Thus unemployment constitutes a big obstacle to development. At the same time inflation is uncontrollable, while life expectancy rate in Nigeria is one of the worst in the West Africa sub-region.
Most people now wonder aloud how the oil money is being spent. Every month Nigeria declares excess crude oil money and work out horrible formula to share it among the three-tiers of government. In spite of the huge resources, we continue to borrow from the IMF and allow World Bank politicians to forecast the growth of our economy. Since Nigeria’s refineries may never resurrect to produce at installed capacity, a band of fuel importers have taken advantage of this unedifying situation to feed fat from the commonwealth to the detriment of the populace. The money spent on petroleum subsidy is approximately ¼ of the federal budget.
When President Goodluck Jonathan canvassed a transformational agenda – a change-centric manifesto, Nigerians from all six geo-political zones voted for him. I think than the transformational agenda articulated by President Jonathan was a compelling vision for a better Nigeria. A TRANSFORMATIONAL LEADER DOES THE RIGHT THING RATHER THAN DO THINGS RIGHT, and because of the penchant for long-term planning, transformation leaders do better when they win the trust and confidence of the people. The official pronouncements of government have always shown that President Jonathan is eager to bequeath a legacy for posterity as a transformational leader. He is optimistic and enthusiastic about turning bad statistics and the negatives into positives. It was for this reason that President Jonathan removed subsidy from petroleum products.
In order to give this policy option a human face and to cushion the effect of hardship faced by the people, the Federal Government has put in place some palliatives. Government has put in place a mass transit intervention and a duty waiver on spare parts for locally produced Mass Transit Vehicles. Contractors have been mobilized to do major rehabilitation works in the railway. This is estimated to employ 10,000 youths in all States of the Federation. On the part of government, there has been a 25% slash of basic salaries of all political office holders. Government has also initiated a review of Ministries, Departments and parastatals, MDAs to see how cost saving measures such as reduction of overhead expenditure could lead to lower cost of the administration. Accordingly, the Danjuma Commission’s recommendations are being implemented.
Government has already reeled out the benefits. Government believes that the removal of subsidy is the only way government can conserve resources for the pursuit of the Millennium Development Goals. Even antagonists of the subsidy regime believe that since the N1.4 trillion used for oil subsidy could better be invested in restructuring the economy by way of generating employment, curbing corruption and increasing productivity through innovation and healthy competition in the downstream sector of the oil industry. This will include building of new refineries and Turn Around Maintenance of existing ones and creating a conducive environment for investments from the organized private Sector. With an increase in private sector participation in the downstream sector, Nigerian economy would regain her competitive edge. This in turn would stimulate growth in those sectors which supplies it with inputs and attendant spill over benefits.
Whereas exponents of subsidy removal regime argue that the policy would reinvigorate large-scale enterprises and public enterprises as well as self-reliance, what may be lacking is public trust in the prudential utilization of resources. But with the likes of Dr. Christopher Kolade as the head of the subsidy re-investment Board, there is immense optimism that the monies from subsidy would be used to fix critical sectors of the economy especially infrastructure and enhancement of service delivery. What may not be in contention is that the benefits that would accrue from the policy will far outweigh the short-term pains Nigerians are facing now. The main question at issue now is whether Nigerians can trust President Goodluck Jonathan.
There is every reason for Nigerians to trust President Jonathan. Two reasons can be adduced this thinking. First, the transformational The President articulated during his campaigns is robust, fundamental and far-reaching. It permeated the entire gamut of economic restructuring, reforms in the health and education sector, revitalizing ailing industries, empowering the people and fixing social security. These are possible dividends from the transformation agenda.
The second and the most critical reason Nigerians should trust President Jonathan is his achievements so far when he assumed office last year. The President has implemented the Amnesty Programme, which dividends are very conspicuous for all to see. He signed the Freedom of Information Bill, FoI bill into an Act and carried out sweeping electoral reforms. Whereas the Petroleum Industry Bill is on its way to becoming an Act; government has signed into an Act, the LOCAL CONTENT ACT. To address the rapidly expanding demand for tertiary education in the Country, the Federal Government has established seven more Universities in Nigeria. President Jonathan, for the first time since 1960, has reviewed the foreign policy of the country to make Nigeria more proactive in solving her domestic problems while not compromising the big brother role she has been playing in continental Africa.
Economically, the administration approved and implemented the new minimum wage and statistics show that the Gross Domestic Product, GDP, has grown from 6.7% to 6.9%. In the same vein, because of the favourable domestic policy environment, Nigeria has been declared as one of the three top investment destinations in Africa. The economic Team is evolving policies to diversify the economy from a crude oil mono-culture to an agro-based economy.
By removing subsidy on petroleum products, the President has demonstrated beyond doubt Mr. President is determined to break the backbone of the oil mafia in order to put money into the pockets of the people. The Subsidy Removal Policy is not only pro-poor in nature but capable of reversing the trend of business failures; devaluation of the economy, infrastructural collapse and the rising cost of private business in Nigeria. President Jonathan is wrestling with the challenges of managing a failed State but with all these measures put in place, PRESIDENT GOODLUCK JONATHAN DESERVED THE TRUST OF NIGERIAN ON THE SUBSIDY REMOVAL IMBRIOGLIO. LET US GIVE PRESIDENT JONATHANA CHANCE!
IDUMANGE JOHN is Fellow, Institute of Public Management, Nigeria.