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You are here:Home>>Strategic Research & Analysis>>Oil subsidy removal, what an insult!
Thursday, 06 October 2011 21:08

Oil subsidy removal, what an insult!

Written by Sulaimon Olanrewaju
Nigerian flag Nigerian flag

The argument put up by state governors for the removal of oil subsidy is not only sickening but exceedingly disdainful to the teeming Nigerian masses.

The governors, suddenly waking up to the reality that they might have bitten beyond their capacity to chew by promising to pay the N18,000 minimum wage, have been agitating for the removal of oil subsidy. Some of them have said without the removal of the subsidy, which would translate to an increase in their monthly allocation from the federation account, they would be unable to pay the new minimum wage. Bunkum. Some of them have even contended that the subsidy encourages corruption as the billions of naira put into the exercise always end up in private pockets and the poor, who are supposed to be the beneficiary of the gesture, are short changed by corrupt officials. Balderdash.

The import of the two positions canvassed for the withdrawal of subsidy from petroleum products, sadly, is that many of those who rule us are nescient of the essence of their high offices.

Let’s start with the second position. If the government has a programme for the citizenry and its officials abuse the programme, is the discontinuation of such programme, irrespective of its importance to the citizenry, the next line of action? Should the citizenry bear the brunt of the greed, incompetence and irresponsibility of government officials? If the system of the government is so lax as to allow government functionaries or a coterie to profit unjustly from a process, should the government further compound the woes of the masses by removing the little benefit that accrues to them from the common patrimony?

Stretching the argument further, will the government cancel its education programme because a clique has devised a way of cornering part of the funds allocated to the sector or because some people get question papers before the examination? Will the government stop funding its health care programme because some groups in the system have perfected a means of stealing drugs from the hospitals? So, what is the meaning of asking the federal government to remove oil subsidy just because some unidentified people are ripping off both the government and the people?

What the government should do, unless it is abetting the culprits, is to find a solution to the menace and that is not Herculean. According to experts, money is the easiest thing to follow in the world. If money meant for the subsidy leaves the government coffers and fails to arrive at its pre-determined destination, it is easy to know where it is detoured. Let the government do what it is supposed to do and stop annoying the masses continually by drawing our attention to its incompetence.

What’s more, all of this talk about subsidy would not have become an issue had the government been alive to its reponsibility. Between 1999 and now, the federal government realised over $500 billion from the sale of crude oil. I am told that what it costs to build a brand new refinery is less than  $20 billion. So, why have we not built new refineries? If only a fifth of the sum had been invested in new refineries, we would have had five new refineries by now.

Governance, to my mind, is about solving societal problems for the good of the majority, not looking for an excuse to deepen the problems of the citizenry. The government should find a way to solve the problem of its saboteurs without further pauperising the people.

Now to the first issue raised by the governors. They need to know that they were not elected merely to pay salaries. The people that elected the governors did so in expectation that their rulers would improve their lot, not that they would make life more difficult for them. At the moment, majority of Nigerians cannot point to any benefit they enjoy from government. Many people provide their own water, electricity and even roads. The government has abdicated its responsibility in many respects. If oil subsidy is removed, it would make life more unbearable for the majority, especially the downtrodden masses as they will have to pay more for virtually everything. Now, the cost of food items has sky rocketed. By the time the oil subsidy is removed, it will go beyond the reach of the masses.

Child poverty

I will be the first to admit that the administration of subsidy in our country needs a review but the review will not be necessary until the government does what is right. Subsidy is essentially for the poor, not the rich; it is for those who are in deprivation, not those in abundance. So, before there can be talks about oil subsidy removal, there must be a system that will take care of the poor. There must be an effective mass transit system, the railway system must be functional. The removal must have a minimal negative effect on the poor. Until an effective mass transit system is in place, it will be out of place to talk about removing oil subsidy.

In 1978, the United States of America government came up with a flight subsidy to encourage airlines to patronise small communities with low air travellers.

Through the programme, the government pays up to 93 per cent of the cost of a flight. For instance, for a round-trip from Lewistown, Montana to Billings, a passenger pays $88, while the government pays the balance of $1,343. The subsidy was initially planned for 10 years because the government believed that the number of passengers would increase considerably over a period of 10 years. But the programme has continued for about 33 years and the subsidy has not been cancelled because of the convinction of the government that if it stops the subsidy, the communities would suffer as contrary to its expectation that there would be an exponential increase in the number of passengers, there has just been a marginal increase.  Billions of dollars has gone into this programme that benefits just a fraction of the US community, yet the government has continued to support the programme at a huge cost because of its commitment to the good of the people.

How I wish Nigerian leaders would have such commitment to the people.


Last modified on Thursday, 06 October 2011 21:15

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