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Sunday, 28 April 2013
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Saturday, 3 November 2012
Opinion: Questions abound for Nigerians
Friday, 14 October 2011
Editorial: Nigerian Government Dishonesty About Fuel Subsidy
The Fuel Subsidy Debate
The Nigerian Social Media space has been considering the possibility of Nigerians waking up from their docility and acceptance of everything thrown at them by their indifferent government to the inspiration of their own Arab Spring early next year.
This has been predicated by the decision of the government to remove subsidies from Premium Motor Spirit what we generally call fuel subsidy early next year.
The chatter has really been confounded by the situation where over decades there have been threats and salami-sliced implementations of the removal but no one is particularly sure of how much that subsidy really is, that it has become some imaginary slush fund of ready cash that the government suggests it will plough back into the economy taking cognisance of the effects such a removal might have on the working classes.
The Truth About Our Government
Sadly, the government has never really had a track record of ploughing oil profits back into the pockets of Nigerians except in the mid-70s after which plunder and squander has been the tack of those in leadership with little consideration of the bottom-line and particular welfare of the generality of the people – there are points for argument in the previous statement but little to dispute in terms of results.
Fundamentally, the fuel subsidy is literally the substrate of the totality of the Nigerian economy, it will touch on every aspect of life in relation to prices for food, goods, transport and every other service apart from the inflationary pressures it will present, but those issues are best left to central bankers and economists whilst one deals with a few other brass tacks.
Plans or Fables?
As a producer of petroleum products, it is bordering on the atrocious that Nigeria imports about 85% of its refined fuel needs because its existing four refineries are poorly managed and are lacking in serious productive capacity which means that the federal government subsidies imported fuel to the tune of $4 billion annually. [TransparencyNG]
Commonsense will suggest that the long-term goal of the government will be to facilitate, encourage or sponsor raising our refined fuel capacity to levels that will ensure that the subsidy expended in imports is radically reduced, at least that is what informed the signing of the memorandum of understanding with the China State Construction Engineering Corporation in May last year to build refineries in Lagos, Kebbi and Bayelsa States at the cost of $23 billion. [TransparencyNG][China in Africa][BBC News]
Whilst it is interesting to note the activity of the Chinese in building refineries in Ghana, Niger and Nigeria, what made interesting news a few months ago was the idea that Niger might get way ahead of Nigeria in commissioning its own refineries and end up exporting refined fuel to Nigeria. [All Africa]
How Much Is The Subsidy?
Besides, it appears no one is sure of what the cost of subsidising fuel is, the Central Bank in its MPC Meeting minutes suggested that the cost was about $6 billion, the on-going debate in the Nigerian Senate suggests the Federal Government budgeted NGN 240 billion ($1.54 billion) for subsidies in 2011 but have found that cost inflated to NGN 1.5 trillion ($9 6 billion) in what is a looking like a typical Nigerian scam. [CBN (PDF) Page 3][All Africa]
This amazing discrepancy should have heads rolling faster than when the Bastille movement chopped off heads in the French revolution, but none such will happen because the matter of responsibility leading on to accountability is just absent in Nigerian governance.
As an aside, the real big cost of governance sits within the profligate nature of our Federal Government, the abuse of security votes at state government level and the exorbitance of our legislature that consumes over 25% of our Federal Government overheads without essentially being a productive sector of our economy.
Indonesia Caught in Denials
Much as the idea of building more refining capacity in Nigeria does not seem to appeal to those resolute in finding another largesse to nudge their greedy snouts into, what adds insult to injury in spite of the now seemingly white elephant plans to build refineries in Nigeria is the news that Nigeria plans to invest Rp 24 trillion (US$2.68 billion) in Indonesia to build three refineries. [Jakarta Post]
The Nigerian Government has gone to great lengths to deny this report, but one has to ask why Indonesia will dream up such a scheme if there were no iota of truth in the same. The Nigerian Government unfortunately for all its protestations has a Matilda Complex about it, its propensity for denying fact and defending lies is legendary especially with the instrument of Social Media personnel it has employed for propaganda, obfuscation, distraction and alienation. [All Africa][AkinBlog]
Our Insurrection In Planning
It has become known that any opposition to the government is quickly construed as unpatriotic whilst the government has perfected a complacency of siege mentality proffering more excuse than reason for any action or inaction they have found themselves in.
At the end of the day, the reasonable thing about fuel subsidy is for Nigeria to build and sustain its refining capacity by whatever means encourages that trajectory and it is only after that is put in place that the desire to remove the fuel subsidy can be justified.
Nigerians have two and a half long months to put everything in place to start off their justifiable insurrection against a moribund, ineffective government in détente and inertia, for once, let us – Arise, O Compatriots and heed a call for a democracy that is fair, just, honest and true.
Monday, 15 November 2010
How the world is changing
China shopping
The Economist published two leaders this week that got me thinking about how the world has changed and how inexorably many have failed to adapt to the change or make the kind of adjustments necessary to embrace change and become more relevant in the future.
In the leader China buys up the world [1], one innocuous statistic showed up which was Chinese firms only own just 6% of global investment in international business. One thing we must not fail to realise is that it is growing and it belies a failing of the capitalist model in the West where somewhat Communist finance is propping up or buying up businesses that were once the mainstays of democracies.
The debate between big and small government that exercises the West is moot much as the idea of state controlled enterprises being inefficient, lethargic and unprofitable. The Chinese are doing something we could well learn and use.
A timeline of decline
Even more arresting is the decline of other economic powers; for in 1914 and 1967, both Britain and America held about 50% of global investment respectively and those years were their peak years.
1914 announced the start of the World War I and there is no telling the cost that was to Britain and consequently World War II just a quarter of a century after. By the 1970s, Britain was not working and seemingly in terminal decline, and though there have been recoveries we find ourselves in another trough exemplified by swingeing cuts which no one is sure would bring recovery talk less of ascendancy.
It would be simplistic to suggest that our governments and representation have helped this decline take root, but blame cannot be too far from their door in the economic mistakes and atrocious policies that have defined each ideological standpoint to the detriment of the lifeblood of the each country’s progress.
Well beyond the World Wars
In 1914 that great African country Nigeria was created and it stands as the most populous black African country by far as well as its second largest economy. With its oil resources first discovered in 1937 there has been promise and prospect but very little to show for what it has.
The second leader in the Economist was about reforming the United Nations with the title Thinking the UNthinkable [2]. There is a strong case for redefining the structure of the Security Council and managing the influence of the permanent members whose status derives from having won the Second World War.
I have my doubts about how France won but that would be stoking the embers of discord. What we have now is the defeated foe of 1945 that is now a strong ally, Germany with an economy much greater than that of France and Britain; one must not forget Japan is a contender too having gone shopping like China only two decades ago.
How times have changed
In effect, 2010 is no more 1945, the fulcrum of power has shifted with the emergence of big democracies, economies and other powers making India, Brazil, Japan, Germany, South Africa and even Nigeria viable permanent members of the UN Security Council.
The growing influence of Islam in global affairs puts both Turkey and Indonesia into consideration too, making the UN Security Council more representative of the shift in power and of the times.
With this change there is probably a case for Britain and France giving up their seats for a European representative but the politics of the UN might not allow for widening of the permanent membership of the Security Council with equal status for all members and the loss of veto power.
Nigeria’s disqualification
The case for Nigeria strong as it may seem on promise is weakened by the notion that it is too anarchic a country compared to South Africa.
This damning assessment is in no way unfair, it simply crystallises our representation, our politics, our economic prospects and sadly our future.
This kind of view can only change when those we elect to represent us lift they game and play it right, all eyes are on Nigeria for 2011 but because of our failings South Africa might well take the spoils.
[1] Chinese acquisitions: China buys up the world | The Economist
[2] United Nations: Thinking the UNthinkable | The Economist
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