This thing
called democracy, particularly the Nigerian brand, never ceases to throw up new
and intriguing lessons about the relationship between government and the
people, and the larger, complex socio-political environment. I had gone to
Lagos on an assignment in the last two days of the year 2011, when around
midnight I received a phone call from someone close to the corridors of power,
informing me that a meeting had just been concluded in Abuja where a decision
had been taken to deregulate the downstream petroleum sector, and thus, in
effect remove the subsidy on Premium Motor Spirit (Petrol).
*Reuben Abati |
I told him
I was aware of plans to that effect, since the President had been holding a
series of meetings with various stakeholders and constituencies on the same subject,
but as at the time I left for Lagos ,
no final decision had been taken. The fellow insisted he knew what he was
talking about and that in the morning, the Petroleum Products Pricing
Regulation Agency (PPPRA) would make the announcement. Sometimes in the
corridors of power, informal stakeholders could enjoy faster access and be even
more powerful than persons with formal responsibilities. There are persons and
groups whose livelihoods are so dependent on government and the people in power
that even a whisper at the highest level resonates immediately as an echo in
their ears. I learnt very early never to underestimate such persons.
As it
turned out, Nigerians were greeted with the Happy New Year news of deregulation
of the downstream sector on January 1, 2012 and if you’d remember, hell broke
loose. It was the end of the Nigerian people’s honeymoon with the Jonathan
administration, the beginning of a long nightmare, and an opportunity for the
opposition to launch an unending campaign of blackmail, name-calling and abuse
against the administration. I received an early morning summon to leave Lagos and return
immediately to the Villa.
The
Jonathan administration was definitely not the first to seek to deregulate the
downstream sector and end a regime of subsidy, as a means of ensuring greater
transparency, efficiency and competition. Since 1987, every administration had
tried to manage this aspect of the curse of oil. Nigeria
is the sixth largest producer of oil in OPEC, and the second largest exporter
of the product in Africa, at a time after Libya ,
at other times, after Angola .
But the big problem has always been making the product available to Nigerians
at home, in an efficient manner and as they say, at an “appropriate” or
“correct” price. The mismanagement of oil resource, which accounts for about
90% of the country’s exports, is at the heart of corruption in Nigeria .
Years of
inefficiency and graft had resulted in the collapse of the country’s
refineries, from low capacity utilisation to eventual collapse, persistent
scarcity of the product, large scale smuggling, the rise of an oil industry
cabal, violence in the Niger Delta, oil theft, pipeline vandalism, and all the
evils of irresponsible leadership. From being a major exporter of crude oil,
Nigeria soon became a major importer of finished petroleum products, and as
international spot prices were volatile, government provided private importers
of refined products, a subsidy that took care of landing costs that could have
been passed on to the people. But the subsidy continued to grow out of
proportion, becoming a major drain on the country’s finances – from 1.42% of
GDP in 1987, it grew to about 3% of GDP in 2011.
Every
administration sought to check the resultant crisis through price controls or
gradual deregulation. The people’s counter-argument and the source of the angry
protests that always followed was that Nigerians should not be made to pay
heavily for a God-given resource, and that if the refineries were to function
efficiently and government officials would moderate their greed, Nigerians
would not need to buy petroleum products at the most expensive rates in OPEC.
The Nigerian Labour Congress (NLC), supported by other groups in civil society,
led the protests against every attempt at deregulation, compelling virtually
every administration since 1987, to review proposed increases in the pump price
of fuel in order to pacify the people. Only Diesel (AGO) and Low Pour Fuel Oil
(LPFO) were successfully deregulated in 2009. By 2011, the regime of PMS
subsidy had become unsustainable. The decision to fully deregulate the
downstream sector in 2012 was the boldest policy move by the Jonathan
administration but it was also the costliest.
The NLC and
the Trade Union Congress (TUC), and their affiliate unions together with civil
society groups took to the streets and shut down the country. The main
opposition party, the then Action Congress of Nigeria (ACN) went into a
propaganda overdrive, throwing every possible mud at the President and the
administration. In Ojota, Lagos ,
the opposition organised anti-Jonathan and anti-government rallies. “Paid” and
mobilised youths and musicians, wearing designer T-shirts, voiced expletives,
danced, and screamed; in other parts of the country, the protests resulted in
violence and the death of many. This was the season of the Arab Spring, and
those who launched what became known as the #OccupyNigeria movement were
convinced that this was the best time to demonstrate the superiority of
people-power over government policies. Everyday in the Villa, at the time, we
agonized over what had become a frightening assault on the administration.
President Jonathan was the country’s first Facebook President, the first
president to use the social media to run an campaign, globally he was second
only to President Obama in terms of Facebook followership, but in the face of
the 2012 fuel subsidy protests, that same online advantage became his nemesis.
Young
people, excited by the idea of an “Ojota Spring” deployed online
hashtags to tear down the administration. Government officials also took to the
media to explain the deregulation policy to the people. Ministers were
dispatched to their various political constituencies to explain, communicate
and convince, thus: defending the government became a test of loyalty. In my
case, before going to work in the public sector, I had written an article in 2009, in which I opposed
deregulation and predicted that the government was so wrong it would soon
mislead Nigerians to such a day when we, the people, would soon start trekking
or riding bicycles, no thanks to official voodoo economics and incompetence.
Access to more detailed information about the extent of the corruption in the
oil and gas sector later made me to review my initial objections to the policy
of deregulation. Nigeria
would be doomed if it continued to rob the poor to enrich the rich and thus
through subsidy payments sustain a tradition of theft and wealth without work.
That
article was dredged up nonetheless and circulated widely and I got called all
kinds of names, including being called a “turn-coat”. It was a trying time for
the Jonathan administration: myths over-shadowed reason. The government was
accused of acting hastily and failing to consult widely. But that was not
true. Weeks before a decision was taken, President Goodluck Jonathan personally
met with state governors, labour leaders, media chiefs, youth groups, civic and
cultural organisations, leaders of thought, traditional rulers, oil marketers
and importers. Behind closed doors, labour leaders and leaders of the ACN did
not oppose the deregulation policy. I recall the union leaders only asking for
palliatives and the ACN submitting a detailed policy implementation paper.
The second
myth was that the government acted on impulse because it was “clueless”. Again,
not true. The House of Representatives had probed the subsidy regime reporting
massive fraud in the downstream sector. The Ministry of Finance and later the
Presidency subsequently set up the Aig-Imoukhuede Technical and Verification
Committees, which made worse revelations about how the payment of subsidy had
become a huge scam. The Ministry of Finance on the basis of available damning
evidence suspended further subsidy payments and insisted on proper verification
of claims, an integrity check that was resisted by the major oil marketers and
their agents. Minister Ngozi Okonjo-Iweala’s mother was later kidnapped in the
midst of all that.
Deregulation
of the downstream sector was inevitable then as it is now, because the fuel
subsidy regime had become a cesspool of officially backed corruption. The
country could no longer afford to pay rent to an oil sector cabal feeding fat
on the inefficiency in the sector, putting in their pockets resources that
could be used to develop infrastructure and serve the people. This was the
principled position. But following the January 2012 deregulation, those who had
urged the Federal Government on, including State governors who always wanted
more money, and marketers who spoke about how deregulation had worked with
diesel and telecomm, abandoned the government to its fate. Opposition leaders
who had submitted a blueprint for implementation, publicly led the protests.
The betrayal was astonishing. The short and long term effects were devastating.
Let us now
fast forward to 2016: The present administration has again, like the Jonathan
administration, announced a removal of subsidy. The pump price of petrol
is now officially N145 per litre. The objectives and the arguments are the same
as in the past. But the context is different. Those who fuelled and funded the
protests of 2012 are either quiet or openly supportive or apologetic as they
now defend the principled position they once abandoned. The labour unions are
factionalised, there is no co-ordinated protest, the media, the people and the
civil society are indifferent, the government is not under any pressure to
convince anyone: same policy, same issues, but different politics!
My
prediction that one day, we will all ride bicycles or trek to work has now come
to pass. But if that is the sacrifice Nigerians have to make to end the
outright brigandage in the downstream sector, so be it, please. Putting the
subsidy thieves to shame, ending a subsidy regime that encouraged
round-tripping, rent collection, smuggling, instant gratification, theft,
insincerity, blackmail, and cabalism may well become President Buhari’s most
important legacy. This could have been done since 2012, but the politicians,
desperately seeking power and office, failed to put Nigeria first, and looking back, it
seems all the young men and women who died in that season did so in vain.
Politicians must learn not to play politics with people’s lives for reasons of
selfish convenience. President Buhari must stand firm but let him also take
steps to ensure that local refining is restored and let him keep an eye on
those saboteurs who always manage to find a way around every public policy. And
to all the 2012 hypocrites now turned today’s yes-men: una do well o.
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