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).
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
utilization 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 organized anti-Jonathan
and anti-government rallies. “Paid” and mobilized 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 #OcccupyNigeria 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
election 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 organizations, 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.
