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Since he emerged as the elected President and Commander in Chief of the Federal Republic of Nigeria at the April 2011 elections, Goodluck Jonathan has tumbled from one controversy to the other.
His proposal on a single tenure of seven years generated heat in the political arena. The debates resurrected the ghost of the tenure elongation agenda of the Olusegun Obasanjo administration, which was rejected by the Fifth National Assembly. For many, it was Jonathan’s subtle meander into the path once taken by his godfather, Obasanjo – who sought to perpetuate himself in office through deceptive constitutional means.
He offered very plausible arguments. The patriotic zeal with which the campaign went, suggested that there could be more than meets the eye. Legislators were very much at the center of it all. They were to richly benefit from the arrangement. Their four-year tenure will now be extended to six years, and they would still retain the privilege of returning to the legislature as many times as their constituents would allow them. But Nigerians would not take chances. They had been deceived so many times that they would find it hard to believe the political class so easily.
Beyond this suspicion were arguments that the President got it wrong in terms of the timing and expediency. Some lawmakers were worried that the President was setting the wrong priorities. Instead of raising issues that would immediately tackle the major infrastructural problems in the country, such as power, roads, and corruption, he was busy plaguing Nigerians with far-fetched political theories.
With the drumbeats dying down on its own, it is perceptible that he has beaten a retreat on the matter. The arguments for the single tenure idea no longer forms part of his public speeches, his media aides are no longer interested, and the battle seems to be lost and won. But the President is not done with the streak of controversy.
Subsidy on petroleum products was conceived to cushion the effect of global oil prices on the poor of the country. The presence of the subsidy, both marketers and regulators of the oil sector have agreed, is the reason why the pump price of PMS (prime motor spirit) is N65 per litre. According to the Ministry of Finance, the Federal Government pays an extra amount of N77 per litre as subsidy. Had that not been the case, Nigerians would have been paying N142 per litre for petrol. In 2011 alone, the Federal Government paid a total of N1.43 trillion for subsidy, an amount far more than the year’s capital budget.
President Jonathan has, however, begun moves to remove the subsidy. In the budget he presented to the National Assembly on Tuesday, it was conspicuously missing. The President’s argument is that market forces should determine how much Nigerians will be paying for a litre of PMS and other products. Since this policy direction was made known to Nigerians, fire and brimstone have been invoked; some have threatened to pull heavens down should the President make good his promise to stop the payment of subsidy for the products.
The rationality of the new policy thrust makes little sense to the poor in the society, who do not necessarily understand the details of the lecture of micro and macro economics being delivered by the Minister of Finance, Mrs. Ngozi Okonjo-Iweala, on the possible developmental benefits accruable from the subsidy removal. The simple day to day economics with which Nigerians are conversant, clearly points to hardship and inflation. When subsidy is removed, the cost of transporting of goods across the country, particularly from rural areas will suddenly skyrocket and that would in turn affect adversely the cost of foodstuff.
This fuel subsidy controversy is offering a strategic opportunity to his political enemies, who are not sparing the chance of dealing a good measure of criticisms on the President. It is now in vogue to speak for the masses and score desirable and necessary political points. This is the time for Senators and members of the House of Representatives to represent their people well in the National Assembly by standing firmly for or against the planned removal of subsidy.
But who is listening to the President? He said the payments were no longer sustainable, arguing that the staggering amount paid as subsidy every year would have been enough to build the necessary infrastructure that would make subsidy unnecessary. The minister of finance said the annual payment of billions of naira on subsidy was a hoax as it was not reaching the poor that the scheme was meant for. She argued that the leakages had become uncontrollable so that only a few middle men were benefitting from the scheme.
Jonathan argued his case in the Medium Term Expenditure Framework spanning 2012 to 2015, and which was submitted to the National Assembly for consideration. He said, “A major component of the policy of fiscal consolidation is government’s intention to phase out the fuel subsidy, beginning from the 2012 fiscal year.This will free up about N1.2tr in savings, part of which can be deployed into providing safety nets for poor segments of the society to ameliorate the effects of the subsidy removal.
“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.”
There have been discordant tunes on the floor of both chambers of the National Assembly. While some think that policy should be supported in view of the obvious abuse of the scheme by both the operators and regulators, others are vehemently opposed to the President’s move. There is, however, a consensus that the continued failure of government to address critical phases in the economy, especially the inability to establish refineries and check corruption had brought the country to this threshold of calamities.
The Presidency had begun a process of lobbying legislators to elicit their support for the policy. The first attempt did not yield any result. In the wake of bomb explosions which have claimed the lives of many Nigerians, the dining and wining over subsidy removal was inexpedient. The lawmakers made it known to the President that they would rather he concentrated on dealing with the security issues facing the country than lobby to have his way on subsidy.
But the President would not relent. He immediately began a batch by batch meeting with the lawmakers. Although it was not clear how many batches of lawmakers had been met, there appears to be a cessation of fire from the green dome. Some senators and Reps still voice their individual opinions once in a while, but the tenacity of the President appears to be working well for him.
Recent revelations at the ongoing Senate investigative public hearing on the administration of the fuel subsidy scheme since its inception are pointers to the fact that the President and his men might be right after all. There are reasons now to believe that the Federal Government has been paying far above what it should have been paying as subsidy for the imported products. Petitions before the committee showed that importers had falsified documents with which they had claimed huge sums of money from the Petroleum Products Pricing and Regulatory Agency as subsidy. Allegations of fraud and falsifications had also led the Federal Government last year to conduct an audit of the status of the payments and imports of products. Sensing that the audit may have indicted the process, the Senate committee has requested the Minister of Finance to make the report available to it in seven days.
The Minority Whip of the Senate, Senator Ganiyu Solomon, has warned that the President should not attempt to unilaterally drop the subsidy from the budget, arguing that it was a legislative matter that affects the people of Nigeria with 109 senators and 360 members of the House of Representatives in the National Assembly.
All those who have disagreed with the President on the matter, have no response as to what would happen should the President make good his plans to phase out the item from the budget. As for the organised labour, they may probably shut down the country in protest. But we may have to wait until the President reads his budget on Tuesday, then we can take it up from there.
When Jonathan came to the National Assembly with the 2012 budget, many were looking for the fuel subsidy. Those, who had expected that Jonathan would not remove the subsidy were disappointed as it was not in the budget.
The reactions of the organised labour and civil rights groups were expcted. The president of the Campaign for Democracy, Dr. Joe Okei-Odumakin, in an interview, said by not including the subsidy, “He (Jonathan) has challenged the will of the people. The stage is now set for the open confrontation of the people’s will with that of the insensitivity of a stubborn President.” The Nigeria Labour Congress, which reactected through its Acting General Secretary, Mr. Owei Lakemfa, said, “The removal is not sustainable and it is not acceptable, and despite the apparent decision of the Presidency on this matter, we know that the government will listen to the people, rather than follow the dictates of the IMF, the World Bank, and their local representatives in government.”
Past administrations have toyed with the plan to do away with fuel subsidy, but lacked the courage to tamper with it. If Jonathan drops the contentious policy, he will be treading a path, his predecessors feared to take. The success of his plan will determine how his government will be assessed.
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