NIGERIA IS BRACING ARAB SPRING

In a recent interview with The News, Professor Tam David-West articulately analyzed the oil subsidy issue in Nigeria and clearly showed that it is a myth to think that removing oil subsidy will be a solution to Nigeria's economic woes. In fact, it appears that Nigeria has become so complacent that everything is taken for granted and the will of the common man is often under-rated. Nigeria is bracing for her own version of Arab Spring that has toppled several governments if, in fact, the government fails to listen to the voice of reasoning coming from those that may be affected the most.

The new economic package that is predominantly based on removing oil subsidy is so ill-informed and it also ignores the basic tenets of policy making. The Minister of Finance has argued that Nigeria spends exorbitantly on importing fuel from overseas and the country may go bankrupt in few years if the subsidy is not rescinded. Yet, we acknowledge the fact that we import fuel because the subsidy ends up mostly in the hands of few whom apparently we do not want to offend let alone apprehend and prosecute. If that is the case, then the government has failed to represent the people and has chosen to represent special interest groups. Should Nigerians therefore, pay the price for our inability to keep the house in order? I urge the government to re-think this fuel subsidy removal bill and scrap it since the common man will be hit the most and the resulting reaction cannot be predicted.

The Nigerian government has its hands full. It is unable to contain violence in several parts of the country like the Boko Haram and the Niger-Delta issues. Even though these acts are more regionalized, the government has been impotent in dealing with the security threats they pose. Nigerians right now need something to galvanize and bring them together as a group with common interest. The fuel subsidy removal is one thing that can narrow the ethnic and religious boundaries that have always defined our reactions to issues.

Why is fuel subsidy a necessity to the average Nigerian?

1. Nigeria is the sixth largest producer of crude oil among the OPEC nations. Yet, the average Nigerian has not benefited in any way from the abundance of this natural resource in our country. Contrary to some claims, the price of crude oil is higher in Nigeria than almost any other member nation of OPEC. Nigerians deserve to benefit from this resource.
2. Crude oil and its bye products should in fact be viewed as "staple" products because the country has failed the average Nigerian in several ways. Most houses are powered by generators that use fuel or diesel because the Power Holding Companies in Nigeria have failed to provide stable electricity even after billions of dollars have been spent on them. Most houses use kerosene for cooking. If we have stable electricity, there will be substitutes to the use of kerosene thus reducing the demand load on kerosene. Transportation is at abysmal stage in Nigeria because there is virtually no rail transport and no economy can grow without that. People and goods are transported mostly by road thereby depending on the consumption of fossil fuels.
3. Any removal of subsidy will imply a significant jump in inflation and many have predicted that the currently proposed monthly wage increase to N18, 000 will be worth N2, 000. The ripple effect will be felt everywhere. Our currency will be significantly depreciated and the price of commodities will be out of control and no one should expect the common man to sit idly and watch.
4. Many factories should be expected to shut down as the cost of production in the country will be very high. Already it is very high at the current rate of both diesel and gasoline. There will even be more erosion of our foreign currency as importation of other goods will rise. Foreign made goods will be sold much cheaper than the local goods. This will further lead to increase in unemployment and eventually stifling of the remnants of local industries.
5. High unemployment breeds insecurity. The removal of the fuel subsidy will in fact, further increase the level of unemployment. There will be fewer funds to spend on the economy and people will tighten up and not support several other businesses because they now have even limited spending money. When unemployment increases, crime also goes up. We are worried about a few militant groups now, we can expect to see a rise in militant and crime groups, and we can expect to have more insecurity including abductions and destruction of properties. Increased unemployment will therefore be a recipe for more crimes thus making the country ungovernable.

From all indications, it appears that the style of our policy making is contrived and does not benefit from the wealth of knowledge that resides in the country and in the diaspora. Nigeria can boast of well-educated and experienced people in different works of life and if these people are brought together we can formulate and implement better policies that can move the country forward. While this article is not intended to be an academic proposal, it is nonetheless clear from reading all the news on the removal of fuel subsidy, that we are only hearing a single voice, that of the Minister of Finance. I propose that for a major issue of this nature that is of significance to the economy, we should open up the policy making to public debate, where many people who are knowledgeable are able to study the ramifications and consequences of such actions.

It is important that we look beyond the economic theory and also look at the social implications. This way, the President and the National Assemblies can be better advised. What we have now is what is referred to as a "group think" mentality. In other words, we are playing sycophancy. We have one strong voice that everyone is agreeing with for fear of possible retributions if contrary views are heard. We cannot formulate a good policy out of fear. I recommend that the Economic Advisory Board adopt what is known as a Delphi Technique Approach. This approach allows all participants to be anonymous and decisions are reached after several iterations without being influenced by any single voice but rather by the voice of reasoning. This way, we can deal effectively with the issue of "group think" and sycophancy. The President and the National Assembly will be better served if policies are rational and not based on bloated ego. Many nations around the world use this technique in their national planning.

Is removal of fuel subsidy the only way to revamp the economy and avoid the nation from going bankrupt? The answer is No. We can no longer continue beating about the bush for so long without really addressing the real economic problems in the country. There are many prescriptions to the current problems we have. Some are easy to solve and some are more difficult. However, they all require the commitment of everyone. Even with oil subsidy out of the way, the economy will not get better. In fact, the ripple effect will make the economy worse. More and more subsidy if any will have to be removed and the country will continue to go downhill. Here are some prescriptions that we may take:

1. We need to start thinking out of the box and think of the interest of the country and the future of Nigeria. We should not continue to protect few people against the interest of everyone. Therefore, the government must do all that is necessary to rehabilitate the four refineries in the country and make them functional to stop the importation of fuel from outside. This will also help to reduce the cost of production of fuel which ultimately will lead to a reduction in the price of fuel at the fuel pumps. This way, the dividends derived from crude oil can be passed on to the entire population. Furthermore, the lower prices of fuel and its by-products may help to energize our ailing factories that so much depend on fuel and diesel to function. The entire process would also provide a lot of jobs and help to reduce the rate of unemployment.
2. There should be strict control of the allocation of oil blocks. Who gets an allocation of an oil block? And why? Are we using national assets for political patronage against the will of the people? When did the allocation of natural resources to individuals become part of Nigeria's constitution? We continue to abuse the rights of everyone by enriching few members of the inner caucus at everyone's detriment. The oil blocks should be auctioned to established oil companies that have the resources to mine them and not to middle men to sell them exorbitantly to oil companies who now shift the excessive cost back to the average person.
3. Corruption must be placed under control. Recently, there were news articles about ghost workers in the local government areas but this pales in comparison to what is happening at both the state and federal levels. Everyone knows now that government employment and politics are lucrative and provide a quick ride to riches. We quietly observe as public officials continue to embezzle and enrich themselves with public funds. Yet there is no reaction from any agency to tame these excesses. Without accountability, no amount of efforts can be made to resolve our economic problems.
4. We must contain misappropriation of funds at all levels and make the three tiers of government local, state, and federal independent. We cannot have one controlling the other and diverting its funds. Besides, the people need to know the type of democracy that Nigeria has adopted - confederation, true federalism or government by a cabal in the name of democracy. The people need to know!
5. We must diversify the Nigerian economy. This can only work if we create enabling conditions to encourage business investment. We cannot have a situation where custom officers are milking investors that are importing machineries and raw materials; police and tugs are chasing over commercial vehicles for N20; state and local governments are introducing useless and reckless multiple taxations; regulatory agencies are abusing their offices for bribes, and the Power Holding Companies will not supply power to run the factories. These acts are criminal and killing the country more than the government's group think approach.
6. We must reduce the size of government. There is so much duplication. For example, we have the Police Force, Federal Road Safety, EFCC, etc. All these are variation of the Police Force. They can be trimmed significantly in size and cut the extra waste of duplicating the resources and personnel they use. They should be more selective in employment and provide better training that is more people-oriented. There are more offices in the government that are duplicated all over the place and some are redundant and completely ineffective.
7. We must reduce the size of the National Assembly and the salaries and the perks that are given to its members. We've gone above and beyond to regard senators and members of the house as "Lords" that their cozy lifestyles make it difficult for them to understand the sufferings of the common man. Of course, some of the proposed changes may need constitutional amendment but it will be worth it if Nigerians are allowed to engage in a referendum on how best to move the country forward.
8. Efficiency, Efficiency, Efficiency - there is so much waste in the country. We waste a lot of money in building structures that are poorly maintained. We waste a lot of money in buying cars for office holders. We waste a lot of money in creating unnecessary perks and allowances for politicians such as security vote. We waste a lot of time in providing services. In fact, we are simply not productive. How long can we continue doing this? We must restructure the workplace and define jobs and have established standards and be result-oriented. Politicians now are millionaires if not billionaires. They make so much money that it gets into their heads. The average Nigerian has an income of less than a $1 a day. Yet, it never occurs to the politician that the welfare of this little man should be his major concern while in office.

Nigeria has tried many ill-informed experiments in the past and muddled through because the people are gullible, dormant and hardly react. They have learned to accept their predicament as the will of God. However, I am convinced that the Nigerian today is ready to react to the injustices that are being handed over to him by those who simply do not care and abuse their public offices. The removal of oil subsidy may be the last straw that broke the Carmel's back. Employing a strategy from the West without understanding our structural differences will have a serious negative impact on our economy. We should be aware that unlike other nations, Nigeria has a unitary economy that is based solely on oil proceeds. There is no other developed industry that can cushion off any potential rise in the prices of gasoline products just the same way there are no industries to absorb the massive number of our unemployed youths if the oil subsidy is removed and the prices of fuel and oil byproducts skyrocket. Nigerians are exposed and majority who have access to the Internet belong to the social networks. This may be the stimulus Nigerians need to react and rescue the nation from further mismanagement and misjudgment.

I pray that President Jonathan will listen to the different views on this matter and engage the public on honest and objective debate on this topic before making a final decision on the matter. Our members of the National Assembly have not consulted adequately with their constituencies but appear comfortable being shielded and protected by their safe havens in Abuja.