THE CONS OF THE FUEL SUBSIDY REMOVAL (2)   3 comments

On January 7, 2012, I wrote a piece on the above subject matter. Sequel to other developments on the same and in the light of more intriguing revelations, I thought it only proper to write this second part.

First and foremost, and to be realistic, ours is a fundamentally unequal society with very huge disparities between the rich and the poor. As such, there’s no how N1.3trillion even if efficiently utilised for infrastructure and other investments would, in the short or medium term, as President Jonathan says, benefit the majority poor. Such an argument is simply untenable. As always, it would benefit the rich so much more than it would the poor or even the middle class. Until such a time as when we can significantly curb corruption and drastically cut the size of government would we be able to see massive financial investments having tangible, transformational effects on our economy.

Secondly and interestingly, the fuel subsidy regime that the Jonathan administration has removed was provided for in the 2011 budget circle which is yet to come to an end. That budget circle is to end in March 2012 after which the 2012 budget, expected to have been passed by then, will go into operation. The question that then arises is why would the Jonathan government remove a subsidy that was provided for in the 2011 budget whilst that budget is still in operation? The alternative should have been to allow the budgetary circle to come to an end by March/April 2012 by which time the removal could have been effected. That makes sense as it would have allowed ample time for the government to undertake sufficient consultations as well as give the people some time to make spending and saving adjustments.

In addition, it surprises me lots that the Jonathan administration appears to be so bent on removing the fuel subsidy using the unconvincing argument of working to secure the future for Nigerians and posterity. The PDP-dominated political class in Nigeria has never been interested in securing the future of Nigeria so they shouldn’t pretend to only be now. After all, they had advanced the same arguments with the NEEDS initiative with hardly any substance to show for it finally. This fact only goes to emphasise that there’s more to the fuel subsidy removal than meets the eye!

Furthermore, if President Jonathan was so sincerely desirous of withdrawing the fuel subsidy just to release funds for development, rather than asking several millions of poor and struggling Nigerians to make sacrifices by pushing them into even more suffering, why can he not direct equal energy and commitment to remove the huge political ‘subsidy’ of the country’s stupidly large and inefficient bureaucracy consisting of just about 1% of the population? When it comes to removing the fuel subsidy that benefits the masses, it takes the Jonathan administration less than no time to do so, to the point of even undermining needed consultations whereas when it comes to cutting down on the cost of governance (removing the political ‘subsidy’), Jonathan tells us the trademark lies the government has become obsessed with. In his January 7, 2012 speech, Jonathan said, “we are taking several measures aimed at cutting the size and cost of governance, including on-going and continuous effort to reduce the size of our recurrent expenditure and increase capital spending…Government is also currently reviewing the number of committees, commissions and parastatals with overlapping responsibilities. The report on this will be submitted shortly and the recommendations will be promptly implemented.” We have had more than enough reports and reviews on cutting the size of government – a thing which doesn’t actually need any in the first place. Beyond that, if 72% of the 2012 appropriation bill is anything to go by; I can boldly tell Jonathan that his government is, in reality, taking no steps to reduce recurrent spending! Again, if N1bn can be allocated for food and refreshment alone for the presidency in 2012, this means Jonathan is so actually insincere in claiming to cut the size of governance.

Yet another pro-fuel subsidy removal argument I find so silly and indefensible is that which the government has been touting all over the place namely that Nigeria’s economy will crash in two years’ time if the subsidy is not removed now. The same fellows who are saying this are also saying that there’s data showing that Nigeria is presently one of the fastest growing economies in the world. In fact, even the EU envoy who visited Jonathan recently said most European countries envy Nigeria’s economy – especially given its favourable growth rate prospects. Now, here’s the big deal. It is a fact that the subsidy regime has been in place for many years. It is also a fact that Nigeria’s debt profile, though rising now, has been worse off before. If Nigeria’s economy did not crash when the going was rough and when growth prospects were very minimal, how come it would suddenly crash now when the prospects are present? Who is fooling who?

Again, is it not contradictory and ironical that the same fellows that comprise the oil cabal which the government says has misused the subsidy funds are members of the President’s economic management team? It is a known fact that someone like Femi Otedola whose company, Zenon Oil, was named as one of those misappropriating and misdirecting the subsidy funds, was a major funder of President Jonathan’s 2011 campaign. It therefore should come as no surprise why a normally malleable president appears so shamefully handicapped to bring to book such a very negligible number of persons sabotaging the country’s mainstay and rather seeks to punish the suffering masses for their wrongs – an act of cowardice from a president who, on September 18, 2010, had promised to tolerate “no sacred cows” in fighting corruption. Mind you, it is this kind of fiscal indiscipline by America’s greedy entrepreneurs, such as which Otedola represents, that led to the 2008 financial meltdown in that country.

Let me conclude by saying that the West has never been interested in the welfare of masses in the developing world, notwithstanding their pretence otherwise. Indeed, Western institutions and governments are particularly jittery now and ever more determined to get pliant states around the world capitulate to their often unsuspecting but eventually exploitative schemes given the changing balance of power in the world economy and their own attendant domestic crises. The very fact that in the past one month, the IMF Managing Director, the UN Secretary-General’s Special Adviser and a special EU envoy have visited Jonathan, taking turns to commend him for the so-called ‘reforms’, smacks of a hidden but sinister Western agenda that Jonathan sadly cannot decipher. It was the first US President, George Washington, who declared in his presidential farewell address on September 17, 1796 that, “Against the insidious wiles of foreign influence, the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government.”

Nigeria, this is the challenge now confronting us and the survival of our patrimony. But give in we won’t! We must remain vigilant, steadfast and resolute in our opposition to the removal of the fuel subsidy.

GOD bless Nigeria!

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Posted January 11, 2012 by Raymond Eyo in Economy

3 responses to “THE CONS OF THE FUEL SUBSIDY REMOVAL (2)

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  1. Very interesting to learn all these.I promise to be among the vanguards of change. The die is cast.

    • Beesy, thanks for taking time up to read. Nice to know that it made an impression. Regarding your promise to be a vanguard for change, I would say that’s the spirit! Keep it up…for Nigeria’s good. GOD bless you.

    • 1. The Bretton Institutions were established to exploitate global resources. 2. Agenda For Secuted Future attempt of this govt is an attempt to secure their pockets

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