THERE’S an ageless saying by wise men that, there’s never ever a wrong time to make a giant leap just as there is never ever a good time to win or to lose. Time is just time, and it is a very essential commodity that is said to wait for no one. In time, decisions are made by the decisive. And in time, indecision is also made by the indecisive. Nations and individuals are always functions of the kind of decisions they made in time. We are either living as products of good decisions made in time or products of bad decisions made also in time.
Nigeria has battled with the issue of fuel subsidy for decades, that is, whether to remove subsidy completely from petroleum products, or whether to retain it and have government partially paying for every litre of petroleum product bought by both rich and poor consumers. While both arguments have very sensible merits but in the end, time was always bound to be the final arbiter of the debate. And when I say time was bound to be the final arbiter, I mean to say circumstances were bound to occur at a point in the time of life of mankind that were going to force a decision – whatever decision.
In this case, the circumstance of the global economic meltdown, occasioned by the Covid-19 pandemic which completely blocked or hindered all forms of international trade and tourism, thereby zapping off Nigeria’s revenues by about 60%, has made it irreversibly compelling for subsidy on petroleum products to be completely removed, as painful as it is. What further aided this decision is the fact that, even before the pandemic reared its head and disrupted all economic activities across the world, global oil prices have crashed to rock bottom, and you can only best imagine what the country’s situation would have been had it been it wasn’t the prudential administration of President Muhammadu Buhari that was in place at such a time!
It was just in 2015 that Nigeria emerged from an era when the country earned so much in oil revenues yet the country suffered the worst neglect and decay of roads, railways, power supply, health infrastructure, education, agriculture and all other human development indices, all because of unprecedented levels of looting and plunder perpetrated by both top and lower level public officials of that era. However, in sharp contrast, the new era begun by the President Buhari administration is an era where the country has been earning just about 30 to 40% of what the previous era earned, yet it is this same new era that the country is witnessing an unprecedented level of infrastructural development across the country.
Even its worst critics have not, and cannot deny that roads are being rebuilt, new rail lines are being built and commissioned, airports are being remodeled to international standards, seaports are getting reshaped and decluttered, new power stations and dams are getting built, and a very deliberate action being taken to diversify the country’s economy from oil dependency to agriculture and technology. The patriotic ban on importation of certain food items and the closure of our borders to enforce the policy are good testaments to that. With steadily dwindling oil revenues, the government became cash-strapped to pursue its ambitious infrastructural development programme, which is the major key to national development. It then resorted to borrowing in order to finance its well thought out programmes.
In spite of the bellicose antagonism of the administration’s enemies to borrowing, the fact will always remain that borrowing isn’t at all bad if the borrowed funds are used for infrastructural development and not for recurrent expenditures, or salaries, or any of the sort. A country with robust infrastructure can easily grow its economy and become self-reliant, which simply means it will always be able to repay its debts and also become a lender. Simply put, if borrowing for infrastructural development were a bad thing, all the world’s leading economies, including the USA, wouldn’t have been in debts now. As at this month, America’s debt alone is standing at $6.6 trillion.
So, with an oil dependent economy cash-strapped due to a severe crash in price and sales, and with its welcomed infrastructural development financed through borrowing, how can such an economy finance fuel subsidy, which is purely a consumption expenditure without the attendant logic and philosophy behind consumerism? Do you borrow money just to finance a consumption exercise called subsidy, especially when the commodities being subsidized (petroleum products) are imported because the plunderers of yesterday deliberately knocked down our refineries just to maintain the neocolonial status of the country for their own gain, or do you borrow money and invest it in capital projects that have the assurance of creating and multiplying jobs, which in turn end up making both the country and citizens self-reliant? Can you now see why I said time was always bound to be the best and final arbiter of the fuel subsidy arguments?
Much noise has been made by the administration’s antagonists about the fact that many Nigerians, including many of today’s leaders of the country, protested the sudden removal of fuel subsidy by the Goodluck Ebele Jonathan administration on January 1, 2012, and that why have the same leaders who protested against the removal now removing the same subsidy. To answer this, I will again revert to the issue of time and circumstances. At that time, the country was awash with huge oil earnings, and in spite of the huge oil earnings, the country wasn’t witnessing any infrastructural development and neither was it seeing any effort to boost agriculture and electricity supply so that the economy could be diversified. Rather, what everyone was seeing was the unprecedented looting and plunder of Nigeria’s wealth by public officials and their families. In such a situation, you can’t deny the people fuel subsidy, which was just about the only thing they could get for themselves in the midst of looting and plunder, especially when the country’s earnings could support the subsidy programme at that time.
It is remarkable that at that time, there was no trust or vote of confidence by the public on government, unlike now that the overwhelming reasonable public trust the government because they see what it does with very meagre financial resources. The Buhari administration has found it very easy to gain public trust on this subsidy debate because when it came on board, it meticulously pruned down the strangely huge subsidy bill to a remarkably low level. For example, while the fuel subsidy bills for 2006, 2007, 2008, 2009 and 2010 were N257bn, N272bn, N631bn, N469bn, N667bn respectively, it strangely and unexplainably jerked up to N2.11 trillion in 2011 under President Jonathan in an election year!
The consensus at that time was that the money was unconscionably jerked up and looted to buy that year’s election by the administration’s top brass, apart from the other looting of other resources not grafted into subsidy payments going on then. The unexplained trillion Naira subsidy payments continued with N1.63tr in 2012; N1.32tr in 2013; N1.22tr in 2014, and when Buhari took over in 2015 it miraculously fell down to N654bn. It fell flat to a paltry N24bn in 2016, then grew slightly to N145bn in 2017, then N1.19tr in 2018 and then N780bn in 2019. Clearly, the Buhari administration has been able to drastically cut down on the fraud in the fuel subsidy programme, which is an elaborate testament of its prudential management skills.
Having exposed and drastically cut down the subsidy fraud, the only reason the administration could bow down to for the total deregulation of the downstream oil sector is the joint crash of both the Nigerian and global economies, occasioned by the Covid-19 pandemic, which made governments all over the world unable to meet most of their obligations. Of course, it is painful, especially to the poor and needy, but if we are able to take a long gaze into the future, using the prudential management of resources and massive infrastructural development going on as backdrops, it will be very easy to see that the future is brighter if we endure the temporary pangs of this total deregulation of the petroleum products industry. It will work. Count on it. This is the ripest time for it because every sensible and sensitive human being has been able to reckon that the Covid-19 pandemic, as cruel as it is, came with a glorious opportunity to reset nations and the world entirely. Therefore, let’s reset Nigeria.