Wednesday, 1 February 2012


Oil subsidy: The anatomy of misconception

In Nigeria you have to be running the central bank, be a former top World Bank executive and be the chairman of IBTC before you can sound like a moron.
Soludo, Okonjo-Iweala and Peterside, standing up there, are not people one would like to take lightly, whatever they say. But down here, with what these three are saying about the removal of the oil subsidy, nothing can sound more ridiculous. They are saying that more than doubling the cost of living for you is not just the only good thing they can do for you at the moment, it is the best thing that could ever happen to you. This provoking and idiotic sounding stance is coming from the top managers of our national economy, and they get progressively confused that instead of trusting them more for what they are saying people are distrusting them more. They could not understand why the poor masses of the country did not rise to congratulate them for causing more hardship and suffering for the masses than anybody had ever encountered before, even under the military.
But what are the major points of conflict rising from the entire oil subsidy imbroglio? The first is that a massive and corrosive corruption machine is operating right under the nose of the federal government within the entire oil sector, now coming to focus with the oil subsidy question. The second is that President Goodluck Jonathan has decided, in agreement with the philosophy of the IMF and other global financial institutions, that only the poor should bear ALL of the bad economic consequences of both failed previous government policies and the all out grasping greed and corruption of the wealthy political elite.
That the first point is valid is clear from the barrage of allegations of corrupt practices coming from the oil sector following the strike actions that ended January 16, some exposed by the Federal House of Representatives. The second point is why no elected politician in Nigeria has volunteered, till date, to forego his personal allowances, (or any significant amount of such allowances) often running into hundreds of millions of naira per month. And these quite legal multi-million naira allowances, going to the already rich, co-exist within the same economic spectrum where a minimum wage of N18, 000 per month could not effectively be paid to the working poor. The president, right in the heat of the mass strike action, offered 25% reduction of the basic salary of public office holders, with his own standing at N0.6m. He also reportedly ascribed N1b for his food in the 2012 budget, which he doesn’t expect anybody to touch.
There is no doubt that the oil subsidy issue is riddled with corruption and inconsistencies, sustained by powerful members of both government and private sector. There is no doubt that to remove the cankerworm a lot of tremendously powerful interests have to be uprooted, and where two elephants fight, as the saying goes, only the grasses stand to suffer.
President Goodluck Jonathan should be commended for taking the first giant step in the direction of dismantling the corruption machine stifling the oil sector, and by effect the economy. He should also be told bluntly that the poor masses of this country alone should not bear the cost of the effort to stabilize the economy. The wealthy political elite should be forced to pay their fair share. They were the ones that caused the problem in the first place. Apologists of the oil subsidy removal like Okonjo-Iweala and Peterside should realize that the ordinary working Nigerian is not concerned about the oil subsidy, probably because its economic function is far more complex than the economic function of the price of agege bread for the next breakfast. The government can remove all of the oil subsidies in the whole world if it likes. What the ordinary working Nigerian does not want is simple. He/she does not want to pay a single kobo more for anything under a government that keeps saying it is on the side of the people. Because any single kobo he/she pays more for anything directly translates to more suffering and hardship on family and community.
Managing the contrast between what the ordinary Nigerian wants and what the federal government must do is the task of governance, the hall mark of leadership. The president is not really doing the wrong thing in going after the criminal special interests the oil subsidy is currently riddled with. He is also not talking the right things, which is the most important part of governance. We are simply still waiting to hear exactly at which point paying more for petrol turns out to be a blessing for us. We, the ordinary workers, who daily sweep the market place. Maybe Soludo, Okonjo-Iweala and Peterside should turn their genius to explaining to us the dynamics of that miraculous point where, in their economics, paying more for goods and services turns to economic blessings for the common man and woman sweating blood at the moment to feed and raise their family all around the country.

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