The FG Ecomonic policy of Subsidy Removal - What about social and moral grounds?
I believe it is morally wrong to remove the fuel subsidy when the Government has not taken any meaningful steps to alleviate poverty. Governance in todays world is more than rhetorics i.e telling people sweet words and knocking them on the head. The FG must take steps like setting in place tangible changes so the the rural and urban poor can have an alternative.
As I write there is evidence that any new refinery has been built or is in design to be built. As I write, the only alternative to kerosene for cooking is back to the woods; gas is being wasted when it can be easily purified and distributed to homes or bottled as an alternative.
The Nigerian economy is almost completely dependent on Petrol and Diesel with very minimal use of Gas and fuel oil. However, the poor depend on petrol to go the farm, to the market, for all social activities like parties (generator, cooking and all related activities for such parties), etc. There is no functional railway that can be used as an alternative.
The effect of the removal will hit the poor hardest. Some families will be devastated if you take N1000 out of their monthly income while the rich who the Government thinks they are targeting will not even be affected if you take a million naira out of their pocket. Afterall, they have other sources of income; some of them may potential be the contractors for the planned investment of the monies realised from the subsidy. Is it only in the fuel subsidy that money is being wasted, or is it just that anything that affects the poor considered to be waste? what about all the monies spent as security vote and unnecessary protocol for government officials, and baseless parties and inauguration ceremonies? are these not wastes. Can someone tell Nigerians how much is spent on security vote nationwide? or how much Estacode is paid to government officials or more still how much money is spent partying? What has the Government done to reduce the thieving in the Government work force? Is it not common knowledge that most projects awarded carry a 10% bribe element for the officials? I cannot show proof but every Nigerian can perceive it as the corrupt practices in Government contracts smells bad in the air.
In development parlance, there is the word call PRO-POOR policies. These are policies that seek to reduce the effect of government's drive for efficiency on the poor. This is why, Scotland produces the bulk of electricity but London (England) uses the biggest without incurring the cost of the transfer of the electricity across vast lands of Scotland to England. This also why even capitalist states still provide social security benefit in various forms to its citizens. The social safety nets as they are called include:
- providing loans to all students going into tertiary institution and allowing them to pay back only after their earnings reach a threshold,
- Providing medical insurance for all (Not only to civil servants and executives)
- Providing a maximum daily limit for intra urban travels (in London, you pay about 3 to 4GBP max using your oyster card in mass transit buses)
- Providing at least a meal a day for those who can't afford to put food on their table
- Guaranteeing loans to property development agencies and allowing low income workers to get on the property ladder
- Providing benefits to those who spend more than 10% of their income on fuel
- etc
The Government though in denial needs to understand that every kobo you take out of a family will impact on other things like their ability to continue to send children to school, to feed children adequately and provide a clean environment for the family and reduce communicable diseases.
The FG just doesn't seem to see things from this angle, I cannot think of any short term project that it has embarked on which will benefit the a good number of poor people. Even the Federal civil servants who work in Abuja have barely any means to get home. For those who have been to Abuja, you will have noticed the huge numbers of govt. staff who gather around the eagle square struggling to get on the very few private buses. Some of them even spend 2hrs just to get a vehicle home. What does it cost a government to contract this service out to a private bus operating company with a performance criteria that will bring comfort to the workers? Is comfort only for Government officials and private businessmen?
The FG only knows how to copy the policies that will hurt the poor and those that will benefit the poor is no good. There is argument and counter arguments at the moment but the people who will feel it most do not even have a voice; only posterity will judge these actions.
Some people make the issues about subsidy look very complex but I always try to keep it simple so everyone can understand why so many people are concerned. Below are some of the main issues:
Lewis
Some people make the issues about subsidy look very complex but I always try to keep it simple so everyone can understand why so many people are concerned. Below are some of the main issues:
- Currently, the FG argues that a cartel (some say about 100 people or thereabout) are the only once benefiting from the subsidy. This is not true, we are all benefiting by paying less for fuel and kerosene. However, it is true that several investigations have shown that a few are making money through various illegal ways using the subsidy; this is a global phenomenon and there is a Globally accepted approach to deal with it but the FG is shying away from this. All over the world corruption has bedeviled the implementation of subsidy but this does not make subsidy bad. It actually brings to fore the need for the Government to investigate, expose and jail the very few who are cheating the entire country of resource which should hitherto be channeled to infrastructural development. Actually who is in better position to stop the cartel and expose the culprits?Is it not the FG? Certainly not the poor Nigerians who do know where the next meal will come from.
- A friend of mine used a very basic analogy that removing the subsidy is like stopping milk supply to school kids in other to build more schools. Sounds simple but if not taken seriously will have repercussions because the the long term result may be less healthy children. If the children are sickly and unhealthy, who will attend the numerous schools built from the savings? Sick children?
- The FG recently initiated Nine Federal Universities in other to extend Federal tertiary institutions to areas where these were not already sited and in addition made funds available for take off and ordered that students must be admitted by 2011(barely 2yrs after it announced the creation of the universities). It is not my intention to discuss the rational behind the speedy implementation for these universities were per se but clearly it was a decisive step by the FG. Would it therefore not be right to use the same decisive approach to order the building of refineries? The cleaning of our polluted lands and water bodies so that Nigerians and particularly the Niger Deltans can do some subsistence farming/fishing to supplement the money that will be lost to removal of subsidy because every activity in Nigeria today require the burning of petrol/diesel/kerosene. Would it be wrong to order the immediate establishment of modular refineries in strategy areas of the Niger Delta where the crude is source and reduce our over dependence on imported fuel?
- It is common knowledge that Government has consistently failed to improve its performance even with increasing funds available to it so what guarantee do we have that with more money, there will be more infrastructure. A man who cannot manage N1, will he be able to manage N10? In your opinion, the FG needs to do some prior works to to deal with the pain that will follow this decision of removal of subsidy by 2012? Areas to look into include mass transportation, health, food, education, etc
- A recent research report published by the GSI concluded that corruption in subsidy implementation affects fuel and agricultural subsidies. What is the government doing to reduce the corruption in fertilizers subsidy? Or are the actors too big to even delve into this area? The GSI report also made recommendations for improving subsidy implementation and the recommendations are that Governments must make polices clear, investigate those involved in the subsidy fraud, expose them, stop them from accessing the subsidy and jail them as necessary. No where in the report did the GSI mention or recommend subsidy removal.
- Finally, the FG had a parley with Private sector Chief executives and came out hailing their decision to support the removal of subsidy. I find this very funny to comprehend. In the first instance, who will the removal hurt? Is it the Jim Ovia's, Dangote's, Otedola's, etc, or is it the common man on the road? Is it not common knowledge that Entrepreneurs especially those who were in the parley will always pass down their production cost to the customers meaning that eventually the poor who will bear the brunt?
In my opinion, Politicians and Chief Executive in public sector need to cut down on their expenses (parties and show-offs) as a way to show their readiness to move the country forward? The Federal Government need to also look at accessing funds which are not utilised in the CBN ($500bn) and look into the capital market for funds to develop the infrastructure. Also Foreign direct investment is falling due to policy somersault and poor enabling environment, January 2012, GE will be investing $300m in Brazil for renewable research. These are the kind of opportunities we need to attract to help the economy in my opinion.
To show seriousness the FG need to give matching orders for the building of refineries including modular ones which will take shorter periods to complete and situate these near the crude oil source.The FG needs to increase the effectiveness and efficiency of public transport in all urban hubs and busy rural/urban link routes. This can be done directly by the FG or through indirectly influencing the states. The FG needs to invest in alternative forms of travel by allowing more airlines, invest in water transportation or outsource these services. the FG needs to also investigate those involved in cheating the system and bring them to book. We see and hear reports of the EFCC and ICPC chasing Governors and bank chiefs but why are we not seeing these agencies chasing the subsidy Cartel. Obviously some must be fishing.
If the FG does some of above then perhaps Nigerians will begin to sway to the Governments subsidy removal proposal.
