Nigeria Democracy and Oil Subsidy Removal: Lessons and Consequences
Ogunwa Samuel Adetola*
Department of Political Science and International Relations, College of Business and Social Sciences, Crawford University, Faith City, Igbesa, Ogun State, Nigeria
The belief that democracy is about people and good governance, this was put to test in January 2012 in Nigeria when President Goodluck Jonathan increased the price of Premium Motor Spirit (PMS) from N65 per litre to N141 per litre. The protests that followed the president’s gesture suggested that no seating government in Nigeria will make such a sudden decision in the near future without consultations with stakeholders and at the same time make provision for palliative measures to help ameliorate the socio-economic consequences. Jonathan administration may have learnt from the national strikes and protests that consultation is part and parcel of a democratic government. The consequences humbled the government to listen to the people and aftermath the government reduced the price of PMS to N97 per litre. The paper argued that it was when the government of Jonathan was ‘dying’ or ‘nearing total’ collapse that the PMS price was reduced and palliative measures were quickly put in place to appease the populace. Also, corruption, mismanagement, institutional decay is characteristics of Nigerian government. This has become ethos of government officials either appointed or elected. Also argued that the protests and strikes conscientized many Nigerians home and aboard. The SURE-P as a panacea which meant to reduce the burden of Nigerians over subsidy removal is yet to be accepted by Nigerians. Pictures from the scenes of protests showed how the citizens at home and abroad demonstrated, the use of force by the Nigerian police, among others. Finally, the paper argued that any seating government in Nigeria should provide palliative measures such as alternatives before implementing policy that affect the general public. This will allow consultations among the stakeholders who will make suggestions for government. The effect of this is, is that it would leads to institutional and capacity building. And the same communicated to the people what government intends to do and provision of temporary measures to assist the public at the long run.
Democracy, Oil Price, Demonstration, Strike, Labour Union, Civil Society, Corruption, Consultation, Stakeholders
Received: April 24, 2015
Accepted: April 30, 2015
Published online: June 14, 2015
@ 2015 The Authors. Published by American Institute of Science. This Open Access article is under the CC BY-NC license. http://creativecommons.org/licenses/by-nc/4.0/
Nigeria returned to democratic government in May 29, 1999 after many years of military rule with euphoria that the new dawn will mark a ‘total’ departure from what citizens experienced during the military regimes. However, this hope was ephemeral and dashed when the elected democratic government beginning from the former president Olusegun Obasanjo to President Goodluck Jonathan resulted to dictatorial tendencies. The government disregarded the rule of law, due process in policy formulation and implementation.
Democratic tenets such as the rule of law, consultation, due process before policy is pronounced has remained elusive. As a result of this, anti-people policies become the order of the day. Yet the country is under democratic regime. People only hears on the radio, television sets or read on the tabloids that government has decided and floated a policy even without the people’s representatives – the National Assembly.
Linked to this development, Nigerians woke-up on the early hours of 1st January, 2012 to hear that the price of Premium Motor Spirit (PMS) otherwise known in local language as "petrol" has been increased from N65.00 per litre to N141.00 per litre (The Punch, January 2, 2012: 1). This increase attracted condemnation from many Nigerians who denounced the government decision and described the government’s action as untimely, callous and irresponsible act on the part of Jonathan led administration. The price increase led to demonstration, protest, strike, and assemblage of Nigerians in many capital cities across the country, demanding unconditional reversal to N65.00 per litre (National Mirror, January 3, 2012: 1, 5).
The crisis which lasted for two weeks led to national political and economic instability. In a bid to save his government, the administration reluctantly reduced the pump price to N97.00 per litre arguing that the proceeds from the subsidy removal would be used to create wealth, jobs, and basic facilities in Nigeria. To what extent does subsidy removal yield development in Nigeria? What are the proceeds generated so far from removal of oil subsidy? To what use is the proceeds put? Is there any development after the subsidy withdrawal? Should oil be only source of revenue for the country? The rest of the paper include: theoretical framework, Nigeria and Oil subsidy, preamble, Civil Society Organization and Nigerian Labour Unions, reactions, outcome of national strike and protests, Fuel Increase – effects, solution to subsidy removal, panacea for oil subsidy removal and conclusion.
2. Theoretical Framework
There is no precise or acceptable definition of democracy. However, one thing is certain about this form of government. It is people’s government. Democracy is about electing leaders and the elected leaders see their elections as a trust imposed on them by the electorates. Similarly, the elected representatives ensure that they initiate or incorporate citizenry into policy formulation before implementation. The involvement of the ruler and the ruled ensures that there is a ‘partial’ contact when policy is being made. Also, it ensures that political power in a democracy is not held for the benefit of the rulers, but is a trust under which the interest of the people is being protected (Ebenstein, 1954). Thus, democracy enables people to freely choose effective, honest, transparent and accountable representatives that translate people’s desires into reality. This becomes a meaningful way to run a democratic system since the governance is at the door steps of the people. This is why it is said that democracy encompasses the political system and human elements. Heater (1964) argues;
There are, it is suggested, five basic elements without which no community can call itself truly democratic. These elements are equality, sovereignty of the people, respect for human life, the rule of law, and liberty of the individual.
Democracy, no doubt, shape people’s and ruler’s behavior including the political environment, political system and foreign affairs. It imbibes fairness, equality, equalitarianism, liberty, consultation, freedom, commitment by all and sundry. This is because people’s desire is what government work upon and government policies become people’s desire. In this way, democracy becomes a culture or way of life is translated into the social contract – constitution where both the rulers and ruled derives their legitimate power. The constitution settle conflicts and reestablishes the trust and legitimacy and confidence on the part of government and people as well.
3. Nigeria and Oil Subsidy Removal: Historical Approach
The British government created Nigerian state. It has multi-ethnic groups numbering about 389 (Otite, 2010) which hitherto existed independently before annexation and conquest (Coleman, 1959). The name "Nigeria" was coined in 1912 and became operational in 1914, followed by political amalgamation of "the two protectorates (northern and southern) were amalgamated to form the Colony and Protectorates of Nigeria" (Coleman, 1958). Indirect rule as policy was used to administer the large territory with pros and coins.
After several constitutional conferences either directly by the British government or by Nigerian nationalists’, independence was won, and the British officials formally handed over political power to elected Nigerians in 1960 (Oyediran, 2007). Before political independence, however, in 1958 crude oil was discovered in Oloibiri in Niger Delta area (Obi and Okwechime, 2004; Obi, 2004).
The post-independent Nigeria continue to witness series of crises from one military coup d’état to another, botched civilian administration, short and long transitional and aborted programmes. Nigeria witnessed crisis in governance vis-à-vis corruption, abandoned projects, failed promises by the rulers in both military and civil dispensations. The citizens have been incapacitated with hardship, Boko Haram saga, unemployment, homelessness, roads unworthiness, contract scams, embezzlements, forfeiture of Bakassi Peninsula (a local government in Nigeria), rigging of elections. Externally, the country showed herself to be charitable organization to the neighbouring countries and international community through donation in cash, peacekeeping operations, restoration of democracy in Liberia, South Africa, Cote d’Ivoire, Niger, etc. (Akinboye, 2013).
Politics in Nigerian state has led to the quest for power, wealth accumulations and the retention of state resources by the ruling elite (Ake, 2001: 3 – 4). This has continued to cripple development and the quest for eradication of poverty, corruption and policy abandonments and failure.
Emanating from inability of Nigerian government to create wealth, employment, functional energy, motorable roads, good transportation system and development generally, the Jonathan administration on the eve of 31st December 2011 jacked-up the PMS price to unaffordable level. This action led to national protests in January 2012 when the people engaged the state in confrontation bordering on the high increase on the price of PMS in the history of the country (The Punch, January 2, 2012 and National Mirror, January 2, 2012). The increment led to heavy protests and demonstration in all the states of federation especially in the state capitals. Below are the detail accounts of oil subsidy removal in January 2012 and the accompanying protests.
President Goodluck Jonathan while presenting the nation’s 2012 – 2015 Medium-Term Fiscal Frameworks (MTFF) and 2012 Fiscal Strategy Paper (FSP) in 2011 hinted that the administration aim to put a stop to endless fuel importation era and to harness more fund for national development. He said that "a major component of the policy of fiscal consolidation is government’s intent to phase out the fuel subsidy beginning from the 2012 fiscal year" (National Mirror, January 9, 2013). He claimed that the purpose is to reinvest into the economy N1.2trn in saving, part of which would be used to ameliorate the effect of subsidy removal. He commented that;
The accrual to the Sovereign Wealth Fund (SWF) as a result of the withdrawal of the fuel subsidy will also augment funds for critical infrastructure through the infrastructure window of the SWF.
Mr. Femi Falana in reacting to the issue of subsidy removal in 2011 argue;
In the last two years a barrel of crude oil which is extracted for less than $10 has been sold in the international market for prices ranging from $100 to $180. Since the cost of production is far less that the price of commodity the issue of subsidy does not arise (National Mirror, January 9, 2013: 36).
He went on to say that;
The Federal Government has been subsidizing corruption and inefficiency arising from official negligence to maintaining the existing refineries and build new ones to meet domestic needs and generate substantial revenue from exporting petroleum products.
He observes that "in 2006, 2007, 2008, 2009 and 2010, the Federal Government spent N261bn, N278bn, N630bn, N421bn and N673bn respectively". Similarly, in 2011, N240bn was appropriated for fuel subsidy by the National Assembly and the Federal Ministry of Finance release additional N1.3trn for the importation of fuel products by August 31, 2011, thus raising the total amount the nation spend on importation from 2006 – 2011 to N3.6trn (National Mirror, January 9, 2013: 36).
In its Front Page Comment, the National Mirror narrated the national consequences which the removal would have on the economy and the people at large, namely: increase in transportation, national protests, limited purchasing power of workers, inflationary effects, tension, instability, and threat of anarchy (National Mirror, January 2, 2012:1-2).
The exponent of subsidy removal, the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, however stated that the commencement of subsidy removal would take effect in April 2012 after due;
Consultation with various stakeholders to persuade them to accept the policy, and that the non-provision in the 2012 budget proposals for the subsidy did not therefore imply its automatic implementation as from January".
In her emphatic statement, she said;
There has been a lot of debate on fuel subsidies and we have all resolved that removing it is a good direction to go on. You have to leave it to us to decide when it is prudent to do so (National Mirror, January 9, 2013: 35).
This statement clearly shows that the government was not ready to let the populace know when exactly the proposal for subsidy removal would take effect thereby putting the people in suspense.
Alas, the government of Jonathan in the early hours of January 1st 2012 based information posted in Website of NNPC hijacked the price of petrol from N65 to N141 without informing Nigerians to prepare and to absorb calamities that the new increment will put on them. Also, sudden increase did not allow the government to do a thorough consultation and to provide the remedy for alleviating the effect of subsidy removal. The sudden action and non-consultation by the Nigerian government led to protests and strike that the government used the army, police force to dispatch the peaceful protests.
5. Civil Society Organizations and Nigerian Labour Unions
Indeed, the subsidy removal led to national protests by all and sundry including civil society groups, political parties, labour unions, students at all levels. Statesmen, politicians, hoodlums all denounced this unpopular decision taken by Jonathan government. The denunciation of the administration by the Nigerian people can be categorized into two namely: the protests led by the civil society organizations under the auspices of Occupy Nigeria Group led by Pastor Tunde Bakare; and the President of Nigerian Labour Congress, Mr. Abdulwaheed Omar and the President of Trade Union Congress, Mr. Peter Esele respectively.
(a) Civil Society Organizations
When the new price of N141 per litre was known, the Occupy Nigeria Group (one of the civil society organizations), students, artisans, market men and women, workers, hoodlums all reacted sharply and besieged many major roads and protested. The first week of the protests which started on 2nd January to 6th Friday, 2012 was organized by Occupy Nigeria Group led by Pastor Tunde Bakare. Within the few days of the protest, Nigerians were on the streets and occupied major high ways, specifically state capitals including monument centers to register their grievances over the price increase.
Throughout the period, major city centers were occupied by the protesters including the Federal Capital Territory. According to National Mirror;
Nigerians from across the divide, putting aside religious and ethnic differences almost brought the government of President Goodluck Jonathan to its knees, when they embarked on series of protests to resist the arbitrary increment in the pump price of Premium Motor Spirit (PMS) otherwise known as petrol from N65 to N141 (January 9, 2013: 14).
As the protests spread, the North which had been conservative on national issues, joined other Nigerians on this issue of national importance;
… Was fully involved in the protests as the ancient city of Kano became the rallying point for the protests, reminiscent of the Tahir Square protest in Egypt that led to the fall of the Hosni Mubarak regime (Omojolomoju, 2013: 14).
In Lagos, while the protests spread and paralyzed economic activities across the state, late Gani Fawehinmi Park (our own Tahir Square in Lagos) was the Headquarters of protest in the state. People gathered at the park from all walks of life as from 7am to late afternoon singing, shouting and displaying their objects such as coffin, charms, and symbols as signs of discomfort and displeasure to Jonathan administration.
Notable Nigerians like Professor Wole Soyinka (Nobel Laureate), Femi Falana (Human rights activist and lawyer), Lanre Arogundade (former President, NANS), Ogbeni Lanre Banjo (National Conscience Party), Chief Maxi Okwu (National Leader, CPP), Comrade Sunny Ofehe (HNDC), Professor Pat Utomi, Fola Adeola (ACN), Professor Niyi Osundare, Felix Lebarty (Musician, pastor), Mr. Richard Akinola (Human rights activist), Sheikh AbdurRahman Ahmad (National Missionary of Ansr-ud-deen), Dr. Is-haq Akintola (Director, MURIC), Ustaz Luqman AbdurRheem (President, TMC) (Lawal, 2012: 9 – 12). The musicians included: Femi Kuti, Kwam I, Sound Sultan, Ras Kimono, among others gathered Nigerians on the evil of subsidy removal (Emedolibe, 2012: 23). Throughout that week, Lagosians were forced to remain in door. As the protests were going on in Lagos and its environs, Kwara, Kogi, Abuja, Ondo, Edo, Kano, Katsina, Oyo, Kaduna, Gombe, Ekiti, Osun, Ogun, etc. protests turned violent in these states when thousands of people hit the streets in protests. In various states people were killed, wounded with the live bullets. For instance in Kano 42 persons were wounded (Madu-west, 2012: 1, 5).
Indeed, the civil protests propelled the way for the major show down by the Nigerian Labour Congress and Trade Union Congress.
(b) National Strike led by Nigerian Labour Unions
Historically, strikes, protests and demonstrations are not new to Nigerian society especially when it concerns oil increase or subsidy removal. Like all other protests staged to address perceived injustices, the organized labour unions called on Nigerians to embark on strike to complement the civil protests which had paralyzed economic and social activities across the country earlier. The national strike was led by President of Nigerian Congress, Mr. Abdulwaheed Omar while is counterpart the Trade Union Congress was led by its President, Mr. Peter Esele. All the states’ congresses complied with the labour directives. The table below shows the history of PMS incessant increases in Nigeria.
However, this is not the first time the Nigerian workers will be on the streets to protest against oil increase as shown in the table above. In 1986 under Babangida, 1994 under Abacha, 1998 under Abdulsalami, 2000 under Obasanjo, 2004 under Obasanjo Nigerian workers have demonstrated against such unjust increases by those regimes.
The labour strike in 2012 over subsidy removal claimed many lives and properties of Nigerians. In Abuja, Kano, Kaduna, Lagos, Oyo, Plateau, Edo, Enugu, Niger, Ogun, Nasarrawa, Osun, Kaduna, Kogi, Ekiti, Ebonyi, Benue, Ondo, Delta, Kwara, etc, many of these states recorded or suffered one causality or another. The first day of the national strike recorded eight death and many injured (Ige, et al, 2012: 1). On second day of the strike, the death toll hits 18 and scores wounded through tear gas and police bullets across the country (Oji, et al, 2012: 1). The Niger State Police Commissioner, Mr. Ibrahim Maishunu observe that The Command will have no option than to use the powers given to us by the law to protect people and their properties. And that is the power to prevent any damage to properties and lives as enshrined in the constitution even individuals have that powers talk-less of the police (National Mirror, January 11, 2012: 8).
|Year||Old Price Per litre||New Price Per Litre|
|October 1, 1978||8.45k||15.3k|
|April 20, 1982||15.3k||20k|
|March 31, 1986||20k||39.5k|
|April 10, 1988||39.5k||42k|
|January 1, 1989||42k||42k commercial vehicles 60k private cars|
|December 19, 1989||42k and 60k||Uniform price – 60k|
|March 6, 1991||60k||70k|
|November 8, 1993||70k||N5|
|November 22, 1993||N5||N3.25k|
|October 2, 1994||N3.25||N15|
|October 4, 1994||N15||N11|
|December 20, 1998||N11||N25|
|January 6, 1999||N25||N20|
|June 1, 2000||N20||N30|
|June 8, 2000||N30||N25|
|June 13, 2000||N25||N22|
|January 1, 2002||N22||N26|
|June to October, 2003||N26||N42|
|May 29, 2004||N42||N50|
|August 25, 2004||N50||N65|
|May 27, 2007||N65||N75|
|January 1, 2012||N65||N141|
|January 23, 2012||N141||N97|
In spite of the government "no work, no pay order", the labour ignored the directive of Ministry of Justice and continued their nationwide strike. National Mirror reported that a police Inspector was killed in Niger in the protest, while in Ogun State, Commissioner of Police escaped death (National Mirror, January 12, 2012: 7).
In other states, two were killed in Delta, while five Akwa Ibom broadcasting corporation workers were injured as a result of defying strike order by the NLC. Also, Enugu Labour Leader, Mr. Festus Ozoene was arrested and tried by the Mobile Court and reminded in the prison custody for enforcing strike order. Houses and cars were set on fire by the protesters as a result of frustration.
As the strike and demonstration enter day five, three persons were confirmed dead, while about 295 individuals were arrested by the police (Fadeyi, 2012: 5, 7). Also, the strike recorded skirmishes between the students and security agents.
Indeed, the national protests and strike as articulated by the civil society organizations and Union leaders paralyzed socio-economic activities including closure of public offices, banks, shopping malls, airports, seaports, oil and gas facilities, motor parks and other business nation-wide. The Director General of Lagos Chamber of Commerce and Industry (LCCI), Musa Yusuf stated that Nigeria lost about N82 billion daily to the strike action. In his words "we have an estimated national output, which is a GDP of N30 trillion. If you estimate the daily output, you are looking at N82 billion" (2012: 9). Similarly, it was estimated that about N795.65bn was lost in the first week "based on officially projected Gross Domestic Product (GDP) for the 2012 fiscal year" (National Mirror, January 9, 2013: 18).
Indeed, the national protests and strike were total. Saturday Mirror of January 14 has this to say Never, in recent times, have Nigerians been this united in a battle. Pained by the hardship that come with the removal of fuel subsidy, it took almost no prompting by the Nigerian Labour Congress and the Trade Union Congress for Nigerians to catch the bug and resolve absolutely to fight the battle meant to extricate themselves from the strangulation of economic hardship.
From Lagos to Ibadan, Kano to Maiduguri, Benin to Port Harcourt, Enugu to Abia, the compliance has been total since Monday, January 9, 2012, when the strike action embarked upon to protest the removal of fuel subsidy kicked off. The roads were deserted. Offices were locked. Quietly, Nigerians stayed back at home hoping that perhaps the government would give a listening ear.
The calls remain. The voices have been raucous, vociferous and obviously demining. The voices have been those coming from the deepest recess of anguish and from the most unexpected of quarters – professionals, elites, businessmen and women, public figures, celebrities, showbiz stars, clerics, pregnant women, nursing mothers, the disabled, the elderly, babes and suckling – all joined their voices to the calls and their feet to the marches.
Far from the usual protest crowd of activists, opportunists, charlatans and hoodlums, this has indeed been an unusual crowd (2012: 9).
Meanwhile, the removal of oil subsidy has been described as "another terrorist attack" on the Nigerian people (Emeana, 2012: 8). The national leader of Action Congress of Nigeria and former Governor of Lagos state, Asiwaju Bola Tinubu commented that the increase in fuel price is Jonathan’s way of "inflicting hardship on citizens" (Ojo, 2012: 9). According to him, the President "has turned from President to Pharaoh and has decreed that the people make bricks without straw".
As the strike lasts, the economy laid prostrate, while people were indiscriminately shot with live bullets by the Nigerian police and other security agencies. In fact the government of Jonathan used army to occupy major streets and the venues of protests throughout the country (The Punch, January 17, 2012: 1). The Punch Newspaper described this as "Jonathan’s army of occupation". The paper further observe that In more ways than one, the victory that government won on Monday was an incomplete one. On one hand, the deployment of troops succeeded in crushing the protests. On the other, it exposed the hypocrisy behind President Jonathan’s oft-touted democratic credentials. A government that reaches for guns and boots to squelch protest songs and speeches cannot be said to be committed to the finer ethos of democracy.
The deployment might have also robbed President Jonathan of whatever remained of his political capital. Even his admirers are bound to be grossly disappointed. During the ailment and after the death of his late boss, ex-President Umaru Yar Adua, in May 2010, Jonathan rode largely on the back of the people’s power to assume presidential powers. The goodwill generated during the period was also crucial to the groundswell of support that saw him through the highwire contest for the ticket of the Peoples Democratic Party and his election in 2011. It is thus not surprising that individuals, and groups, across the country, have reacted to the President’s action with shock, and questions (The Punch, January 17, 2012:2).
Jonathan’s deployment of soldiers attracted international criticism and warning to the government to stop killing armless protesters. According to Amnesty International, wish "to reiterated its call on the Nigeria Police Force to stop shooting at protesters after at least three were killed and 25 injured in the past two days" (National Mirror, January 12, 2012: 10). The organization urged the Nigeria Police Force to abide with International standards, to prevent additional loss of life and properties.
7. Outcome of National Strike and Protests
The protests embarked upon by the organized labour and civil society groups in the country have revealed untidy, corruption and deliberate attempt by the government appointees to enrich themselves with the national cake or common good that ought to be spread among the populace.
While the government yielded partially to the wishes of Nigerians and reduced the price of Premium Motor Spirit to N97 per litre, the House of Representatives capitalized on the national strike and set up a committee to peruse the records as regard implementation of the subsidy proceeds from 2009 – 2011. The committee which was chaired by Farouk Lawan uncovered some irregularities in fuel importation, distribution and subsidy payments. According to the Report This lack of record keeping contributed in no small measure to the decadence and rots the Committee found in the administration of the PSF. This is evident also in the budget preparatory by MDAs where adequate data is not made available to the National Assembly. The committee had to resort to forensic analysis and examination of varied and external sources (including the Lloyd’s List Intelligence) to verify simple transactions. In this regard, the PPPRA is strongly urged to publish henceforth, the PSF accounts on quarterly basis to ensure transparency and openness of the subsidy scheme (National Mirror, January 9, 2013: 37).
The report indeed showed the gory state and mismanagement of petroleum product in terms of importation, distribution and subsidy payments to those who were licensed to import fuel into the country. The report equally uncovered conflicting figures supplied to the committee by different authorities mandated to ensure smooth operation of petroleum sector. For instance, Akpan reported that Contrary to the earlier official figure of subsidy payment of N1.3trn, the Accountant-General of the Federation put forward N1.6trn, the CBN N1.7trn, while the Committee established subsidy payment of N2.58trn as at 31st December, 2011, amounting to more than 900 per cent over the appropriated sum of N245bn (2013: 37).
Lawan Committee report revealed that the Central Bank of Nigeria (CBN) was not responsible to any authority in the country but acted on it own The corporation (CBN), in 2011 processed payment of N310.4bn as 2009 – 2011 areas of subsidy on Kerosene, contrary to a Presidential Directive which removed subsidy on Kerosene in 2009. The corporation also processed for itself, direct deduction of subsidy payment from amounts it received from other operations such as joint venture before paying the balance to the Federation Account, thereby depleting the shares of States and Local Government from the distributable pool. Worse still, the direct deduction in 2011 alone, which amounted to N847.9bn, was affected without any provision in Appropriation Act (National Mirror, January 9, 2013: 38).
The report showed further that some oil marketers collected subsidy of over N230.12bn PMS volume of 3,262,960,225 litres that was not supplied. According to the report The particular Accountant-General that served during the period 2009 was found to have made payments of equal installments of N999m for a record 128 times within 24 hours on the 12th and 13th of January 2009, totaling N127.8bn. The confirmed payment from the CBN records were made to beneficiaries yet to be disclosed by the OAGF or identified by the Committee. We however, discovered that only 36 marketers were participants under the PSF Scheme during this period. Even if there were 128 marketers, it was inconceivable that all would have imported the same quantity of products to warrant equal payments (National Mirror, January 9, 2013: 38).
The alleged marketers are shown in Table below.
|Integrated Oil and Gas||N30.7bn|
|D. Jones Oil||N14.89bn|
|IPMAN Investment Limited||N10.9bn|
|First Deepwater Oil||N257.3m|
Although the protests exposed the corrupt practices in the oil sector, it did not achieve the desire result. Yinka Odumakin averred the reason for failure Because the protests did not go the way of the Arab Spring, which led to change of government in Egypt, Tunisia, Libya and some other Middle East countries, the corrupt elite in Nigeria is still holding on to power. Unfortunately, despite that the protests exposed the fraud and corrupt practices in the downstream oil sector, nearly all those who were indicted one way or another for corrupt practices in the oil sector are walking the streets free today. Those charged to court for fleecing our commonwealth in the name of subsidy have not been diligently prosecuted. Corruption has continued to occupy Nigeria (National Mirror, January 9, 2013: 14, 16).
The same opinion was expressed by a former member of the House of Representatives, and one of the organizers of the Occupy Nigeria protests. Dino Meleya had two views on national protests. On positive side, the protest Was successful to an extent that the corrupt practices in the oil sector and in governance have been exposed. It had conscientised Nigerians and made the ordinary man on the street aware of his fundamental human rights. It has created awareness in the minds of Nigerians that they can ring their government to account for their actions and inactions while in office and out office (National Mirror, January 9, 2013: 16).
On negative side, he commented that But it has not been successful to the extent that the status quo has remained. The government has continued to wallow in corrupt practices and the present government has grown from bad to worst. President Jonathan has graduated from a weak leader to a wicked leader and the massive corruption that pervades the land has continued unabated (National Mirror, January 9, 2013: 16).
The National Publicity Secretary of the Conference of Nigerian Political Parties (CNPP), Osita Okechukwu stated that the president has lost the social contract entered with the people of Nigeria and that;
In this part of the world more often than not those in power forget that the power they exercise is on trust reposed on them by the people (National Mirror, January 9, 2013: 16).
The protest exposed the corruption under-belly of the regime and most importantly that this is democracy not dictatorship. It vindicated people like Professor David-West who maintained that there is no fuel subsidy, that it is corruption that is being subsidized.
The 2012 protest is a hard lesson to the government and future generation of government which must think twice before taking some irrational anti-people decisions like the increase in pump-price.
8. Fuel Increase – Effects
Before announcement of petroleum increase, the Jonathan led government stated that proceeds from the subsidy removal would be used to provide some basic amenities for the people in Nigeria. While the stakeholders in Nigeria doubted this government position, in the last one year huge revenues have indeed been generated by the government. Where is this money? Of what use are they spent?
In quick turn, the administration set up a Committee on the Subsidy Re-investment and Empowerment Programme (SURE-P) headed by Dr. Christopher Kolade. The Committee which was inaugurated in February 2012 was mandated to use the subsidy funds to provide basic amenities such as child health, community services, women and youth employment, infrastructure, public works and vocational training.
The Committee speaking through its Chairman in August 2012 stated that N105b was collected from the government. The Committee appropriated the amount as follows: N89bn for transporters as a revolving loan scheme. Second, about 100 physically challenged people-friendly buses for the operators (no amount disclosed). Third, the East-West, Abuja-Lokoja, Onitsha-Enugu, Kano-Maiduguri, and Shagamu-Ore-Benin roads (No amount disclosed). four, N2.3bn Abuja-Kaduna railway. Five, N2.2bn for rehabilitation of Port Harcourt-Makurdi and Jebba-Kano rail-lines. Six, N3.9bn disbursed to 14 states to execute pilot projects, and seven, N352,974,040 and N352m to hire 2,000 midwives, 2,000 community health workers and 9,000 village health workers in the six geo-political zones (The Nation, August 17, 2012: 11).
In order to appease the citizenry over oil subsidy removal, the administration in its national broadcast on January 7 announced that 25% salary cut of the executive to augment fuel subsidy savings. This is yet to reflect in the socio-economic life of people (Akinmutimi and Fadeyi, 2012: 1 – 2).
In spite of Christopher Kolade disbursements, condition of the people still remained the same, even became worse than what the present administration met. The concept of development as far as the government is concerned is not connected to human capacity improvement, quality of life, transformation of way of production and other human activities. Thus inequality, unemployment and illiteracy continue unabated.
SURE-P has not reduced poverty, unemployment and inequality, because government uses the national or common wealth to feed its apostles of internal and external compradors. This has made Nigerian peoples to live below US$1.25 dollar a day (Lemo, 2012: 4). The Nigeria 2006 national census figure showed that;
The youths constitute about 70 per cent of the population in Nigeria. The youths a critical mass of people whose action and inaction can develop or destroy the fabrics of the society.
No wonder, their idleness made the national protests and labour strike thick, effective throughout the period.
The reports have it that "a total of N71.10 billion subsidy fund accruals between April and June 2012" was shared between the levels of government to take care of SURE-P (National Mirror, January 9, 2013: 18). No one can say precisely where SURE-P is located and projects financed through revenues from subsidy removal.
Also, no capital project has been embarked upon by the three tiers of governments except the SURE-P roads, ail projects, and token appointments to insignificant Nigerians. Accordingly, The rabid obsession of the leading elite for cornering public funds earned from oil is at the root of the subsidy scam and the non-development of other important sectors like agriculture, manufacturing and technology, power infrastructure, education, health, etc and seems the major reason the nation’s four refineries are clinically dead (Editorial, National Mirror, January 9, 2013: 18).
The withdrawal of fuel subsidy has therefore continued to make Nigerians poor and poverty stricken. Cost of living in Nigeria is skyrocketed since the petroleum product is tied to other commodities like kerosene, diesel, and petrol. Similarly, any increase in price of fuel usually affects the prices of goods and services.
On the prices of basic items such as yam, rice, beans, palm oil, gari, kerosene, gas, bread, tooth paste have gone up. Building materials such as cement, planks/wood, blocks, steel, doors, nails, etc. are unaffordable in the country. On other hand, the prices of direct services such as school fees, transportation, and medical bills, among others have gone up astronomically.
9. Panacea for Oil Subsidy Removal
Nigeria became monocultural economy after she discovered crude oil in large quantities in 1958. This led to oil boom in 1970s. The effect of oil boom led to neglect of other mineral resources which the country has comparative advantage to develop the country holistically. The following will help to resolve the crisis in oil sector and at the same time the need to diversify from mono-oil economy tendency to other areas where the country can make do without oil.
1. Total reengineering of oil sector in particular the petroleum ministry and its sister body NNPC. Re-engineering and capacity building should be made transparent.
2. All oil marketers are to operate oil refineries and open for public inspection. The lifting of refined petroleum products in their respective refineries is a sure way to true oil deregulation.
3. The government should holistically approach re-engineering of all refineries to operational level. Sequel to this, there is the need to build more refineries in a bid to enhance the efficiency of production and distribution. A refinery should not be built in a place where there is no crude oil to refine.
4. The Nigerian government should concentrate on diversification of economy into other areas such tin, iron ore, coal, limestone, niobium, lead, zinc, cocoa, groundnut, cotton, palm oil, etc.
5. The last national protests and strike have taught the Nigerian government a very big lesson. This is to suggest that government should put in place palliative measures at least six months ahead if there is any need to make such a decision on the Nigerian people.
6. The civil societies and Nigeria labour unions, and other Nigerians at home and abroad have indeed showed that we can never, never again be taken for granted by any government in Nigeria irrespective of action or inactions of government. Nigerians will always take their destiny in their hands when need arises.
7. The Nigeria Police Force should be trained on how to guide and provide conducive atmosphere for peaceful demonstrators without firing live bullets. In fact the Nigeria Police Force should serve as a cover for the protesters that is how is done in many democracies.
8. Those killed and injured by the government’s bullets should be compensated and streets named after them.
9. Those identified as corrupt individual and organizations while manning the oil subsidy in terms of ordering, supplying and payments be investigated thoroughly, and if found guilty the law should take it course on them.
10. The government at all levels, through SURE-P should provide long lasting solution to the decadence on our roads, schools, health, housing, water, energy and through capacity building provide job opportunities for all Nigerians.
Indeed, last national strike and protests have created an avenue which raised the awareness of the citizenry and the wickedness and corruption in Nigeria society, which have plagued the Nigerian society over the years. Similarly, the demonstration has shown that the Nigerian government lack capacity to deal with those identified as parasites in the oil industry. The palliative measures cannot be meaningful without political will and capacity building strategically put in place, which must be translated into capital projects, social infrastructure and amenities, job creation and empowerment for Nigerians wherever they are.
Some pictorial scene from the Protesters across the Country, January 2012.