Sunday, January 1, 2012

Good luck wishes Nigerians a horrible year!

Yes, that is the only way to see the removal of all subsidies on petroleum products in Nigeria, as announced by President Jonathan today. With petrol now N141.00/liter, that means in Dollar terms that Nigerians have to now pay $3.2/gallon. That is about the price of petrol in the US right now. But what really, does this mean for Nigerians? Consider this. Only this past year, 2011, did the federal government raise the minimum wage to N18,000 or $111.00/month. Even at that, not many state governments have committed to this hike in salaries. In Abia State, for instance, the government there had to expel all non-native state-employed workers, on the grounds that that is the only way it can afford to pay its workers $111.00 a month.
So, while we contemplate what the removal of petroleum products subsidies means for Nigerians, consider that if a minimum wage earner were to spend all her salary on petrol, she can only fill an average car's tank just twice. So you see how callous, insensitive and predatory this decision to remove the subsidies, especially in a country where the government has not invested in mass transit systems. The last time the government removed some of the subsidies (which led to the raise of petrol prices to N65/liter), it set up a Petroleum Trust Fund into which the monies accruing from the reduced subsidies would be kept. Did the government really give Nigerians any account of what happened to the funds in the PTF? Popular lore had it that that it became a slush fund for the ruling party's electoral campaigns. Even in the early days of the PTF, when it was run by the largely incorruptible Muhammadu Buhari, 20% of the Funds simply went to the Armed Forces, no questions asked. Still the Buhari days were, so to say, the good old days, when the PTF actually did a few meaningful things. Not any more.
This is why, even if one were to idealistically imagine that the funds from the removed subsidies could pay for the massive infrastructure Nigeria sorely needs--it is still producing about 1/6th of Egypt's electric power, though its population is twice Egypt's, and its road network is primitive, and state-owned schools are in sorry state--the kleptomaniacs in especially the executive and legislative branches of government will ensure that such fantasies are simply just that. So, what is to be done? If Nigerians agree to suffer through this new regime of high petrol prices, how can they hold this government accountable for their suffering? What can they do to make sure that the harsh days ahead will not simply pay for the decadent lifestyles of the political elite and their accomplices?

That is the big question of 2012.

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