More than the sudden total removal of subsidy on petrol, a combination of corruption, opulent lifestyle of political office holders and mismanagement of resources by successive governments appears to be the main reasons fuelling the people’s anger and the driving force of the nationwide strike
She appeared ruffled and desperate. Clutching her baby behind her as she searched through heaps of refuse, the woman simply identified as Mama Tola was totally oblivious of her environment. All attempts to stop her from further running her hands through the smelly rubbish fell on deaf ears. “I can’t stop searching for it. It is the food I had just prepared for my baby and I cannot afford to get her another one,” she said. Too poor to afford a food flask, the woman had packaged her child’s food in a black polythene bag, which a neighbour mistook for rubbish and threw in the trash can. By the time she came looking for the polythene bag, the can had been emptied into a waste disposal truck. But since the waste disposal truck was still within the neighbourhood, Mama Tola thought it expedient to retrieve her baby food from it.
Reminded that even if she were to retrieve the food, it would be unhygienic to give to her baby, the woman who ekes a living by sweeping houses within her Orile Agege, Lagos neighbourhood, was not bothered. “I can’t afford to prepare another food for her today again so I have to get this one or she will go hungry,” she explained. Mama Tola only stopped searching through the refuse when a neighbour offered her some money to make her baby another food.
She is not the only one faced with this kind of situation. Also in the same category with her is Emeka Anyaoso, an Imo State indigene, resident in the Ikeja area of Lagos. The father of four has been jobless for over three years after he was laid off at a tomato canning company in Lagos. Anyaoso was relieved of his duties when the company went under. Since then, he has had to struggle to feed his family. Towards the end of 2011, Anyaoso’s situation became so stringent that he had to send his son to a neighbour’s house to beg for food on Christmas day. That strategy is not his exclusive preserve. Every weekend, there are Nigerians who send their children to different party venues around their neighbourhood armed with big polythene bags. Their mission: Scavenge for leftover foods and drinks. The family will then feed on that for as long as it can last.
For this class of Nigerians, making a living and feeding had been a difficult task even before the federal government suddenly announced the total removal of fuel subsidy on January 1. With the rising level of unemployment particularly among the youths, the poverty situation has been compounded. In 2009, 70 million Nigerians, about half of the nation’s population, were said to be living below poverty line, relying on $1 per day. At that time, according to Magnus Kpakol, coordinator of the National Poverty Eradication Programme, NAPEP, the geo-political breakdown showed poverty much more grinding in the northeast and northwest with 72.2 per cent and 71.2 per cent respectively. They were followed by north-central, 67 per cent; southwest, 43 per cent; south-south, 36.1 per cent; and southeast, 26.7 per cent. Right now, with prices of goods and services going up by over 100 per cent, their situation is better imagined than experienced. Thus, many Nigerians appear to have been pushed to the wall such that the removal of fuel subsidy was just a catalyst for them to vent their pent-up anger. This much was captured by the Financial Times of London in its editorial last Tuesday. “Nigerians are justifiably angry,” the newspaper observes. “Since President Goodluck Jonathan’s government lifted a longstanding subsidy on fuel, the pump price of petrol has more than doubled, transport costs have soared and food prices jumped. For tens of millions of Nigerians living on the edge this represents a hardship too far. Moreover, it is one that has been imposed before the government can claim either to have raised living standards or significantly improved service delivery,” the newspaper argues.
Even then, the newspaper is not faulting the removal of fuel subsidy by the Jonathan administration. It actually subscribes to the opinion that subsidy has to go. Said the newspaper: “Every government for the past 30 years in Nigeria, both civilian and military, has known as much. What is questionable is the timing. An Islamist insurrection is threatening the fabric of the federation and dividing Nigerians along religious lines. The policy is the right one, but the reckless way he (the President) has gone about it risks pouring fuel on existing fires.” In the opinion of the paper, the federal government got it wrong on two fronts: timing and approach.
Nasir El-Rufai, former minister of the Federal Capital Territory, FCT, Abuja, who is not known to be a fan of the administration, shares the newspaper’s sentiments. In addition to the wrong timing, El-Rufai said the policy would only further punish Nigerians who for many years have been impoverished by a combination of corruption and mismanagement of resources by successive governments. As far as he is concerned, Nigerians have no business living in the throes of poverty but for the fact that they have actually been made to subsidise the government for so long. “When a Nigerian pays N65 for fuel rather than N40, he is subsidising the incompetence of government by N25.
When a Nigerian has to buy a generator and buy petrol and diesel because electricity generation is worse off, he is subsidising the incompetence in government. When a Nigerian has to drill a borehole, buy pure water or bottled water rather than get public potable tap water, he is subsidising the inefficiency of government,” he says.
El-Rufai is also of the opinion that, “when a Nigerian has to maintain three phone lines or three different Internet subscriptions just because of call quality or crippled bandwidth, he is subsidising the failures of government regulation. When a Nigerian has to pay heavily to secure his life and property through personnel and gadgets, he is subsidising the failure of government to protect him constitutionally. For bad roads, we subsidise by having to visit the mechanic more often than usual or sometimes with our lives.”
“Situations such as these,” says Tunde Bakare, pastor and convener, Save Nigeria Group, SNG, “are some of the real reasons Nigerians took to the streets in protest last week.” For many of the protesters, the federal government’s decision to totally remove subsidy on premium motor spirit, PMS, otherwise known as petrol, was the proverbial last straw that broke the camel’s back. As they protested, shutting down the country’s economy last week, many insisted that government had no moral right to ask the people to pay more for what were obviously its failings. Many argued that the reasons cited by government for removal of fuel subsidy reek of corruption and ineptitude.
These are equally the views of Bakare. “In addition to the reversal of this painful overdose of punishment on Nigerians, we also demand that the issue of corruption in Nigeria, and in the oil subsector in particular, be addressed at this time. This is a golden opportunity to do just that,” Bakare declared, adding that “the monumental corruption in NNPC (Nigerian National Petroleum Corporation) stinks to high heavens. As at today, nobody in Nigeria, with the exception of a few NNPC officials, knows how much we make from the oil sector. For example, if crude oil is sold in naira today and payment is made 90 days after at a higher dollar denomination, the figures usually released in Abuja are based on the lower naira denomination at the time of sale. The question is, what has happened to the difference? The obvious answer is corruption.”
To convince the people about its seriousness, Bakare who was vice-presidential candidate of the Congress for Progressive Change, CPC, in last April general elections wants government to arrest and prosecute those responsible for corruption in the downstream sector of the oil industry. That is one issue that gets the people angry. That was the submission of one of the associates of Dino Melaye, former member of the House of Representatives, earlier arrested by the security ahead of last week’s protest, after his release by the police. According to him, “This is a government that is strong against the weak, but weak against the strong.” The argument is that Nigerians are being made to pay for the greed of the influential few. Not only that, Bakare also wants government to reduce its overhead cost. Said he: “It is pure madness that over 70 per cent of our annual budget is spent on financing the fancy and appetite of our political office holders. In the current 2012 budget before the National Assembly, the Presidency alone has a feeding allowance of approximately N1 billion. Over N1 billion is budgeted for medical treatment at the Aso Rock clinic. Over N1 billion has been allocated for fuel and generators. The Presidency has also budgeted N280 million to buy two bullet-proof cars, and N300 million for dining sets. The least security vote allocated to governors is N6 billion a year; some governors receive over N1 billion a month. This unbridled folly must be challenged and thwarted.”
This line of argument is pointing at the increasing cost of governance in all the three tiers of government, the sickening level of waste by politically exposed persons, their inability to fight corruption and their penchant to be strong on the weak and almost spineless in tackling the strong. Again, it is believed that most Nigerian leaders are always quick to ask the governed to make sacrifices while they, the leaders, feed fat on the system.
Apparently unwilling to be tagged a selfish leader who also condones corruption, President Goodluck Jonathan in a national broadcast on the eve of the mass strike announced government’s decision to equally make sacrifices and fight corruption. “To save Nigeria, we must all be prepared to make sacrifices. On the part of government, we are taking several measures aimed at cutting the size and cost of governance, including ongoing and continuous effort to reduce the size of our recurrent expenditure and increase capital spending.” In this regard, the President said he has directed that overseas travels by all political office holders, including himself, should be reduced to the barest minimum. The size of delegations on foreign trips will also be drastically reduced while only trips that are absolutely necessary will be approved.
The President then went further to add what he considered a clincher. “For the year 2012, the basic salaries of all political office holders in the executive arm of government will be reduced by 25 per cent,” he said.
But this offer, which many describe as belated and an afterthought, has since been taken apart by the opposition parties, labour movements and civil society groups. The Action Congress of Nigeria, ACN, described it as “mere tokenism.” Francis Njoku, a legal practitioner, wonders what percentage of the total take home pay of political office holders does their basic salary represent. “We all know that the basic salary is very small. Why limit it (the cut) to the basic salary. If the President wanted to be taken seriously, the cut should have affected the entire emolument, not basic salary that is nothing. It shows that this administration is not serious about trying to create equilibrium in sacrifices. We all know that their allowances are mind-blowing.”
This is equally the view of Peter Ozo-Eson, chief economist, Nigeria Labour Congress, NLC, Abuja. “If we must face reality, the cost of maintaining the executive, as well as the legislature, is becoming a burden [on] the economy. This has nothing to do with their salaries. Even if you place Mr. President on zero salary, the office would still be attractive because a colossal amount of money is spent on his feeding alone, not to talk of other allowances,” he argued.
This perhaps explains why Njoku asks, “What business [do] the President and his vice have placing the burden of the feeding of their families on people, budgeting N1 billion for their food when they are paid salaries? Why should the Senate president be earning N600 million annually in all allowances? Is that not madness?”
And he sure has good reasons for saying so. Members of the Nigerian legislature are some of the highest paid in the world. Senators in the United States, US, earn about $6,000 (or N948,000 monthly or N11.4 million per annum) and that is about what a university professor, or a director in a state department, or a doctor with 20 years experience, or a teacher with 25 years experience earns in the US. In Nigeria, a senator earns N245 million per annum, representing the salaries of about 25 vice chancellors or 50 medical doctors or 60 directors in the public service or 500 schoolteachers. The Nigerian senator’s salary, which is far in excess of what Barack Obama earns as US President, still excludes a severance package running into several millions of naira.
This is also in spite of the fact that upon resumption of office, each of the senators for instance is paid a lump sum of N130 million. This was said to have been the monetised value of their housing in Abuja, cost of setting up a constituency office as well as for the purchase of an official car. In spite of this provision, each of the senators still got an official car bought at government’s expense purportedly for community work. Commenting on the legislators’ mouth-watering salaries and allowances in Abuja during the nation’s 51st independence anniversary last October, Richard Dowden, a British journalist, had described as unacceptable the fact that Nigeria, a country with 10 per cent of the world’s maternal and child mortality and 10 per cent of the world’s children out of school, has the highest paid politicians in the world. “1 million dollars for a parliamentary salary with another 1 million dollars in expenses is obscene,” noted Dowden.
But the wastage in government is not limited to that. For instance, whereas the US President has only two aircraft, Nigeria’s President has nine in his fleet and voted money recently to buy one more. The British Prime Minister has only two official cars; his counterpart in Nigeria has about 23 in his pool and only recently voted N300 million to buy two more bullet-proof cars. The US, almost the size of the entire African continent, with about 312.8 million people, is administered by a President assisted by 24 ministers working through 32 government parastatals and commissions. In Nigeria, the President has 42 cabinet ministers and 20 special advisers all working through over 400 government parastatals, many of which workers are so idle that even the President or even the supervisory minister may not know they exist.
Whereas government argues that the N1.3 trillion spent on fuel subsidy within the last one year was unsustainable, nothing has yet been done about the revelation of Hamman Tukur, former chairman of the Revenue Mobilisation, Allocation and Fiscal Commission, RMAFC, that government spends about the same amount yearly on the emoluments of federal government, 36 states and 774 local governments’ political, public and judicial office holders.
While announcing federal government’s decision to equally make sacrifices, Jonathan said his administration is already looking at committees, commissions and parastatals with overlapping responsibilities while calling on all ministries, departments and agencies of government to cut down on their overheads.
Onyekachi Ubani, a lawyer and social activist on his part, says the sacrifices announced by the President are simply not enough. “We have gone beyond salary, we are talking about gross corruption and ineptitude in government,” Ubani said.
In search of a solution, Njoku says political office holders should not live above the means of Nigeria as a country. “A situation whereby over one third of the budget is spent on political office holders, that is where the problem lies, and not the peanut that is purported to be spent subsidising petrol. One should expect a minimum of 50 per cent reduction in the total emolument of every political office holder and their advisers,” Njoku said.
For those in this school of thought, there are examples to draw from other parts of the world. Concerned about growing complaints over income inequality and rising prices for housing, transport and other basics, the government of Singapore recently decided to effect a pay cut of 36 per cent. The pay cut saw the salary of Lee Hsien Loong, the country’s prime minister, reduced by over $1 million. He is not alone. David Cameron, prime minister of Britain, did that when he got to office. Faced with the economic meltdown, Obama decided to freeze his salary and those of his cabinet members and all federal workers.
Beyond pay cut, Reclaim Nigeria Group, a social rights movement, wants government to prove its seriousness by putting in place a law that makes stealing of public funds an offence punishable with public execution. The group also wants the immunity clause, protecting governors and the President from litigations, to be removed at both the state and federal levels. In addition to that, the group wants the President to sell off all the aircraft in the presidential fleet; sell the presidential villa and replace it with not more than 6-bedroom apartment; provide not more than one official car and no foreign medical treatment for any political appointee. The group is also calling for the scrapping of the office of the First Lady among others while adding that “we are the employers of the President and his appointees, anyone who is not satisfied with this term of engagement should resign.” But Nigeria is not in want of a law against sharp practices; it is just that there is a great deal of impunity among political office holders. Aside from that, the call for the scrapping of immunity clause has been a vexed issue over the years. But Nigerians suspect that there is a conspiracy between the executive and the legislature over this matter.
On his part, the President appears as equally concerned about the issues agitating protesters. “If I were not here to lead the process of national renewal, if I were in your shoes at this moment, I probably would have reacted in the same manner as some of our compatriots, or hold the same critical views about government,” he said. He, however, said that though these are tough times, “tough choices have to be made to safeguard the economy and our collective survival as a nation.” He said his administration is also concerned about the challenge posed by corruption while insisting that the deregulation policy is the strongest measure to tackle this challenge in the downstream oil sector.
But Bola Tinubu, former governor of Lagos State and leader of ACN, says if government were sincere in this regard, it would have used an entirely different strategy. He argued that government ought to have looked at the removal of fuel subsidy as an evolutionary, long-term process instead of as a sudden event accomplished by executive fiat.
“If government had proceeded along these lines, it would have first perfected the plans for the new programmes and projects that would receive the funds previously allocated the subsidy. These plans would have been in place and ready to implement. Only then would the subsidy be removed. To say that they will develop programmes once the subsidy is removed suggests government’s heart is not in these alternatives. Government only raised this possibility as a public relations afterthought to douse public opposition,” Tinubu reasoned.
Diezani Alison-Madueke, minister for Petroleum Resources, disagreed. “If the issue of fuel subsidy was removed earlier as part of the components of deregulation, by now we would have seen private companies both indigenous and foreign investors in both domestic and export-oriented refineries across the country as they did in the upstream sector,” the minister said.
With that statement, Alison-Madueke may be trying to pass a message that the current crisis has a history that predates the Jonathan administration. The Olusegun Obasanjo administration actually started the process of full deregulation of the downstream sector of the oil industry. The administration sold 51 per cent of government’s shares in the Port Harcourt Refinery to the Bluestar Oil Services Limited Consortium, owned by Aliko Dangote and Femi Otedola, both businessmen. The process was however truncated by the late president Umaru Yar’Adua government following agitations from the labour movement and civil society groups that the sale of the refinery be reversed.
Abubakar Yar’Adua, the then group managing director, GMD, NNPC, appeared before a Senate committee to also argue that the corporation was capable of turning the refinery around, adding that it was actually prevented from doing that by the Obasanjo administration which he claimed was more interested in selling the plant. He also argued that what the nation needed to do was to devote money to the repairs of the existing four refineries and also build new ones. The then NNPC GMD promised to deliver the well-refurbished refineries in six months.
In view of this, government refunded $721 million to the Bluestar Consortium while $80 million was released to the NNPC for the repairs of the four refineries. Over four years after, the refineries are still functioning at less than 30 per cent of installed capacity, necessitating importation of petroleum products and provision of heavy subsidy by the government. These are some of the reasons Nigerians are now wary of trusting the current administration or any of its agencies when it promised to use monies saved from removal of subsidy to repair the existing refineries or build other public infrastructure.
But what is the way forward? As far as El-Rufai is concerned, those giving economic arguments for or against fuel subsidy withdrawal miss the point totally. “It is not about economics. It is about trust… from about 2010 till date, nearly N10 trillion has been spent on government officials, trips abroad and other perquisites. In the 2012 budget, National Assembly intends to spend N150 billion on itself, the same amount as in 2011 to pay those huge allowances. It has not been reduced. That is the issue and government can only earn that trust through small steps,” he said.
There is a dilemma here. To earn the people’s trust requires time, which Jonathan’s government does not appear to have in abundance. The federal government needs to move fast to resolve the stalemate. This is why many stress the need for labour and government to reach a consensus so that the country can move forward.
Additional reports by HELEN ENI, RAYMOND MORDI, AYODEJI ADEYEMI, ARUKAINO UMUKORO and ABIOLA ODUTOLA