By Owei Lakemfa
There is a country called Nigeria. For three decades, its coffers were daily looted in the guise of fuel subsidy. The looters are known by name and some are known faces. The companies they use in looting are registered and have addresses. Rather than bring the criminals to book, government decided to remove the subsidy.
Thus, the people are forced to pay astronomical prices for fuel, while the subsidy looters keep their loot and are free to forage for other things to loot. This is the truth. There is also the lie; that fuel subsidy has now been removed. The truth is that it is impossible to remove fuel subsidy no matter how much the people are visited with high fuel prices.
This is because there are two
basic variables over which the people have no control. First, is the continuous
and steady devaluation of the Naira; every devaluation of the currency creates
a fuel subsidy gap. It is like digging a hole to fill another hole. The
craziness in this is that the first hole continues to widen.
The second subsidy-inducing
variable is the cost of crude oil at the international market. Since Nigeria is
not refining the crude oil it produces, it is condemned to buying refined
petroleum products at international market prices. When you add to this, the
cost of refining abroad, freight, insurance, taxes and demurrage, the price of
a litre would have swelled.
Futurologists
say when the Dangote refinery comes on stream, this second variable would be
taken care of and prices would come down or crash. I am a person of little
faith in economic speculators who since 1981 have told us the same thing, then
preach that we should have faith in a bright economic future.
On Dangote, it is about a businessman
said to be building the largest refinery in Africa, and our economists and
money managers like brother Godwin Emefiele speculating on his motives. Some
claim he would earn so much foreign exchange for the country that the Naira
will appreciate. In a country famed for inadequate regulation, supposing
Dangote decides to charge so-called international prices for his products, or
in fact, decides to sell to foreigners to the exclusion of Nigerians, will he
be committing a crime?
Aliko Dangote is like a man
holding a bird in his hand, and our economists and leaders are speculating on
the colour of the bird; some say it is purple, some black, others say it is
green, white , green. This is witchcraft economics.
So, President Bola Tinubu needs
to be cautious of experts who repackaged the disastrous and ruinous Structural
Adjustment Programme, SAP, of the military regime as fresh ideas. He needs
thoughtful patriots like Odia Ofeimun who have the welfarist, programmatic and
developmental mind of an Obafemi Awolowo.
It is understandable that
President Tinubu has to give political jobbers appointments. But it is also
necessary for him to have people who can look him in the eye and tell him the
truth. Such people can also constantly remind him that he is in office for two
basic reasons: the security and welfare of the people. Any other matter is
fashion which comes and goes. At the end of his tenure, his government and
legacy will be assessed based on how he fared on security and the peoples
welfare.
The half a Kobo wisdom I have
which I can share with him is that all his programmes should be subjected to
those twin tests. Let us take, for instance, his decision to introduce student
loans in our tertiary institutions. I like learning from history. So I expect
the President to reflect and tell Nigerians why the student loan system was
scrapped decades ago while the scholarship and bursary schemes were retained.
Secondly, what logic is it in us resurrecting the student loan scheme when the
same scheme is collapsing in the United States, Canada and Western European
nations with these countries desperately trying to get out?
Some of the basic problems of
the student loan scheme is mass unemployment with people being unable to repay.
Even where some get jobs, the wages are so low that they are merely surviving.
In the US, the loan debts is now
over $1.6 trillion with over 45 million Americans trapped in it. This
means that one in three young American adults with some three million above the
age of 60, are trapped in the debt peonage. Over one million Americans default
with the rate of defaulters this year estimated at 40 per cent.
The debts have become so much a
liability that some American youths decided neither to get married nor raise a
family until they have been able to repay the loans which can take decades.
The Biden administration this
May, decided to give some of the defaulters some breathing space by cancelling
$66 billion in student debt. This has snowballed into a crisis as
the Senate voted to shoot down the Biden plan and the American President
responded by vetoing the legislation.
If the Tinubu administration
goes on with its Student Loan Act, our situation is likely to be worse than the
Western situation because we have a worse unemployment crisis, lack basic
social protection, very poor statistics and have far higher rate of inflation;
these are unlikely to change in the next 8-24 years when the loans should be
repayable.
While the Americans tend to
remain in their country, I foresee Nigerian youths ‘japaing’ (fleeing
abroad) just to escape the debt prison.
Also, although government says
it does not intend to introduce tuition fees or increase fees in the tertiary
institutions as a result of the student loan scheme because the institutions
are not financially independent, it means that fees can be increased just by
declaring tertiary institutions financially independent.
Education is crucial to the country’s future.
So if government says there are not enough funds to sustain
the current funding system, it needs to first calculate how much tertiary
education costs. Tell us how much is available and the cost gap that exists.
Then we can answer the next logical question: how do we fund the difference?
For instance, can we save money by scrapping the House of Representatives and
transferring the trillions of Naira spent legally and illegally on it? Its
functions can be transferred to the trimmer and much more representative
Senate.
Also, can we ensure that
the Tertiary Education Fund of 2.5 per cent of company profits are largely
collectable and accountable?
The Tinubu administration has no
need to use torchlight searching for solutions to the myriad of problems in the
country; the broad daylight is enough, it is more a question of choices and
priorities.
*Lakemfa
is a commentator on public issues
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