NNPC, Sanusi and politics of kerosene subsidy
The way I see it, if there are still any questions on this matter, they should be directed to the Ministry of Finance, which should have seen the need to provide for subsidy on kerosene. I want to believe that the officials of that ministry are not politi
For nearly two months, altercations between the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC) over allegations of missing billions of dollars have re-ignited an intense debate over the issue of transparency in government. Trouble started when, in a letter to President Goodluck Jonathan, the CBN Governor, Sanusi Lamido Sanusi, said that the NNPC was yet to account for the sum of $49. 8m that should have been remitted to the Federation Account.
The claim led to a rebuttal by the NNPC forcing Sanusi to review his claim to $10.8 billion. In the CBN’s subsequent account of the $10 billion, it turned out that the NNPC spent $8.7 billion towards on kerosene subsidy, a claim that the CBN has rejected, and insisting that subsidy on kerosene had been eliminated since 2009. Though the NNPC produced evidence to buttress its case that it acted within the law, the CBN has now upped the figure to $20 billion.
Before going into the merits or demerits of both positions, it would be useful to clarify the purpose of public policy. As almost everybody is aware, the CBN is the government’s bank with responsibility for warehousing Federal Government’s money and aligning monetary policy to achieve the economic goals of the government and, overall, the economic advancement of the country. In spite of its independence, in most cases, it is expected to work in tandem with the government.
The world over, because of its pivotal position in the economy, pronouncements of key officials of any country’s apex bank are considered very seriously by a cross-section of local and international businessmen. Nigeria is not an exception. For many an investor, releases from the CBN represent the barometer by which the country’s economic health is measured. Such is the great score placed on the position of the CBN governor that even if he just sneezes in his bedroom, the economy is bound to go into immediate convulsion. You can therefore imagine what happens when the CBN governor coughs in the public. It is against this background that the unending statistical feud between the CBN and the NNPC should be considered.
In making its case and not disputing that there was indeed a directive by late President Umaru Musa Yar’ Ardua to the effect that subsidy on kerosene be stopped, the NNPC has argued that the directive was neither in the gazette nor communicated to it by Nigeria’s oil minister at the time. It is not clear why the minister then, Ajhaji Rilwanu Lukman, for a long time Nigeria’s oil Czar who commanded global respect as a leading technocrat, failed to do that.
To gazette the directive implied that it had become a public document. That would have flouted the President’s directive. And without a gazette, the minister couldn’t direct the NNPC on the subsidy removal. Although Section 6 of the Petroleum Act gives the minister the powers to fix prices of petroleum products, rather than proceed with deregulation, an inter-ministerial committee was set up on the issue whose report could not be considered by the President who, for all practical purposes, was no longer active in office.
With the status quo retained, importation of kerosene became so unattractive that the private sector bailed out, leaving the NNPC as the last resort. The NNPC faced a dilemma: between the devil and the deep blue sea, which way would be a better path to take. Did the corporation made a wise decision by ignoring what was seen as an ambiguous directive, and taking steps to eliminated the supply gap? That is the question, and my position is that it was a wise move. If it hadn’t, the kerosene shortage would have been blamed on it any way!
The way I see it, if there are still any questions on this matter, they should be directed to the Ministry of Finance, which should have seen the need to provide for subsidy on kerosene. I want to believe that the officials of that ministry are not politically naïve. I do not know if they were out of the country during the debilitating fuel riots/ strike of January 2012. I doubt that anybody in his or her right senses would want to create a throwback to the subsidy strikes of the period, a most trying period for the country. That is what an unannounced withdrawal of subsidy on kerosene will lead to. It is in this context that we should examine selective whistle blowing by high government officials like Sanusi.
Did the NNPC break any rules? Perhaps. Faced with a possible acute scarcity of a commodity that the wellbeing of over 70 percent of Nigerian families depends on, should the NNPC have acted otherwise? I definitely don’t think so.
My take on this is simple: whistle-blowing as Sanusi has done is not a crime. Remember that it takes only for good (and I add honest) people to do nothing, for evil to grow. To that extent, Sanusi was acting within his limits if he genuinely pointed out incongruous activities in the NNPC. The challenge before Sanusi is to prove that in this instance, his motive is both good and honest.