Do They Mean Well For Jonathan On Subsidy?

By

Na-Allah Mohammed Zagga

muhazagga@yahoo.com

 

Once again, Nigerians are grappling with the nightmare of another imminent withdrawal of petroleum subsidy, which may produce ripple effects on transportation costs and concomitant impact on inflation and virtually every aspect of life. Past experiences of unfulfilled promises to make life better through the investment of subsidy withdrawal proceeds is the main reason Nigerians are reacting with valid concern to the latest temptation by Jonathan administration to withdraw petroleum subsidy, thereby throwing millions of ordinary Nigerians to the wolves of the market forces. Earlier, the government had warned Nigerians about imminent tough times ahead as if subsidy is the main obstacle to economic growth and the apparent inability of the government to provide social services to the citizens. As patriots, we should have no reason not to make sacrifices for our own good if the burden of such sacrifices is evenly shared by our leaders, especially in a country where a Senator audaciously collects N45million per quarter under the guise of the so-called constituency projects without any scruples. In the words of the former Madagascan leader, Mr. Dedier Ratsiraka, “it is very important to die for your country but it is more important to live for it.”

 

The contemplated removal of the petroleum subsidy is the remotest thing the Nigerian voters could have bargained for from a President that enjoyed enormous and widespread national good will, both in the recent Presidential election and during his struggle to extricate himself from hostile elements bent on frustrating the process of making him Acting President when his former boos had his feet in the grave. In fact, the pan-Nigerian mandate won by President Jonathan is such that nobody would have expected him to punish Nigerians as a pay back for the incredible good will they extended to him. Sadly, however with the planned removal of petroleum subsidy, on the advice of so-called experts, President Jonathan has given ammo to his critics who say that his administration is the extension of former President Obasanjo’s government, which was inherently cold-hearted towards the people. Nobody opposes subsidy removal because they question the good intentions behind it. The real issue is the lack of credibility by successive governments in justifying the arguments for subsidy removal.

 

Former President Obasanjo sustained subsidy withdrawal to a point a litre of petrol was selling at N75. His administration argued with nauseating emphasis that subsidy removal would enable the government to provide social services more effectively. It was a superficially appealing argument. Yet, at the end of the day, the social services were not significantly better. Poverty stuck to majority of Nigerians like limpet, despite the withdrawal of subsidy. The quality of roads, health and education was not better either, despite the huge proceeds that accrued to the government because of the subsidy withdrawal. The only exception perhaps, that subsidy withdrawal produce positive results was the performance of the defunct Petroleum Trust Fund (PTF), established by the late General Sani Abacha administration. Despite the criticisms of PTF itself by some Nigerians, the fund at least left behind some trace of evidence that, properly managed, the proceeds of subsidy withdrawal, can improve the quality of social services to a remarkable extent.

 

With the self-defeating insincerity of past administrations in Nigeria, the Jonathan administration should appreciate the cynicism and scepticism of Nigerians towards the latest effort to remove subsidy, ostensibly to make us enjoy the “dividends” of democracy much better. One is not arguing against the good intentions of the government in this respect. In fact, only a fool will support Nigerian losing over 300 billion annually as a result of subsidy or endorse the idea of smugglers and other elements in the underground economy reaping huge benefits at the expense of the people. Self interest is the smuggler’s article of faith; it is not his business if millions crush to despair or hopelessness as a result of his inordinate greed. But should the ordinary citizens of Nigeria be punished because of the government’s seeming inability to stop and punish the smugglers and other enemies of national development? What are the sources of the incredible wealth of customs officers (both in service and retirement)? With an incurably corrupt customs service where civil servants cannot account for the number of posh houses they own across the country, can we stop smugglers from sabotaging the good intentions of subsidy withdrawal policy? Are these smugglers not known? Are they not supporters of ruling parties of the country?

 

If the government cannot fight corruption because of the fear of hurting powerful men and party loyalists, then we should forget about achieving the good intentions of subsidy withdrawal. With a corrupt civil service and a thieving political class, it is doubtful if even angels can make the good intentions of subsidy withdrawal work in Nigeria. A story was told of a Black American leader who came to Nigeria and was so excited by the quality of posh houses built in Abuja by individual Nigerians. As he got home to U.S. the story goes, he told fellow blacks of the progress Africans were making by building houses without mortgage! He was to learn later to his shock that the houses which excited him in Abuja were built by civil servants and politicians who stole the money from the public.

 

Ordinarily, the policy of subsidy withdrawal doesn’t have to cause such intense national debate. However, we are in a society where the people don’t trust their leaders because of their precious experiences of disappointed expectations. The biggest challenge before the Jonathan administration over subsidy withdrawal is removing stubborn public scepticism towards the government’s good intentions. Nigerians have no difficulty making sacrifices for economic recovery. But their fear is that successive governments have almost always defeated the arguments for subsidy withdrawal by their insincerity.

 

One of the arguments made by the former President Obasanjo administration was that Nigeria was committing almost 50 percent of annual national budgets to debt servicing. As a result, it argued, it was impossible for the government to deliver social services effectively. And on the strength of these arguments, Nigeria’s international creditor nations (London and Paris Clubs) sympathetically granted us an 18 billion dollar debt relief in 2003. With hindsight, did the performance of the government in these social sectors justify the arguments for debt relief? When he visited Nigeria in 2000, the former U.S. President, Mr. Bill Clinton, told a joint session of the National Assembly then that his country would support a debt relief for Nigeria “if we are convinced the benefits of debt relief would go to the ordinary Nigerians.” In all honesty, therefore, did the benefits of debt relief ultimately and significantly change the quality of life of the ordinary Nigerians since 2003? As long as corruption and insincerity infect governance at all levels, the good intentions of subsidy withdrawal may always suffer. President Jonathan and Finance Minister, Dr. Ngozi Okonjo-Iweala, are not magicians to overcome the factors that have always frustrated the positive implementation of the policy of subsidy withdrawal.

 

The ordinary Nigerians are not the cause of the factors that make subsidy withdrawal policy not to achieve its good intentions. President Jonathan has to contend with the baggage of the failures of successive administrations to sincerely implement subsidy withdrawal to the broad advantages of ordinary Nigerians. Former President Obasanjo once told Nigerians that a litre of a bottle of soft drink was more expensive than a litre of petrol. That was a good point to justify subsidy withdrawal. But at the end of the day, the same smugglers that the policy intends to eliminate still circumvent the system and continue to make billions with the connivance of corrupt civil servants and politicians. The policy of subsidy withdrawal is a zero-some game. Unintended elements become richer at the expense of the ordinary Nigerians the government wants to protect by the policy. The Jonathan Administration has a big task to convert public skepticism into optimism because of the lack of credibility by previous administrations to sincerely implement the policy of subsidy withdrawal. Former President Obasanjo, despite being an apostle of subsidy withdrawal, ended up making life more comfortable for a tiny minority of his cronies in the private sector by giving them incredible import waivers while at the same time increasing value added tax (VAT), thereby punishing the ordinary Nigerians. This is the kind of hypocrisy that makes Nigerians to be suspicious of the latest arguments about the wisdom of subsidy withdrawal by the Jonathan administration.