We Don’t Need This Fraudulent Subsidy On Petrol
When in January 2016, the then Managing Director of the International Monetary Fund (IMF), Christine Lagarde, who was on a four-day official visit to Nigeria, urged the Federal Government to cancel its petrol subsidy programme, saying, “..Not only do they harm the planet, but also rarely help the poor,” she knew exactly what she was saying about the ultimate beneficiaries of what can only be described as the greatest scam in Nigeria’s history. As with many other well-intentioned relief programmes in the country, the ambitious attempt to ameliorate the effect of rising prices of crude oil and by extension, fuel products, through a subsidy regime, has metamorphosed into what is today a ridiculous absurdity that is draining the national coffers of trillions of naira. It is an unsustainable regime that has gone on far longer than necessary and the twin issues of nonfunctional refineries and contaminated fuel in circulation only serve to bring this vexatious debate on the removal of the oil subsidy back to the front burner of national discourse. Well, it should because as the country begins to engage in a conversation on where to pitch the tent of political leadership for the coming years through next year’s election, it must be made abundantly obvious where the front liners stand in this debate. Any candidate(s) wishing to perpetuate this mindless hemorrhaging of the nation’s scarce finances through these continuous subsidies must be given neither audience nor votes. Anyone who will not hit the brakes on a regime that siphons upwards of N 3 trillion of monies which could have been used to improve the welfare of the average Nigerian must be an enemy of the state. As to how we arrived at such a bloated subsidy regime, we need to briefly take a look at oil revenue history. In the 1970s, global oil supply chains suffered the knock-on effect of two specific events in the Middle East, namely the Yom-Kippur War of 1973 and the Iranian Revolution of 1979. These two events effectively disrupted oil supplies from the region, thereby creating difficulties for the nations that relied on energy exports from the Middle East. The immediate consequence was that across wide swathes of geographical space and across the borders of Canada, Australia, New Zealand, the US, Western Europe and Japan, there were large shortages in petroleum supplies. As a result, the prices of the commodity rose astronomically. Nigeria was not exempt. As the costs of petroleum products continued to rise, the strain on the common man’s pocket only worsened. The continued use of international rates for petrol, as was the common practice in the majority of countries around the world, left Nigerians having to increasingly pay more with the rising international rates. To offset the impact on the finances of the average Nigerian, the government felt compelled to discard the international rates and regulate local prices for all energy products. This was officially made formal with the enactment of a decree in 1977, by the General Olusegun Obasanjo military regime, which effectively institutionalised the oil subsidy regime in Nigeria. It was nobly intended to lessen the burden or cost of refined petroleum products, on the one hand, and to offer citizens some level of financial support from the government, on the other. It seemed to have achieved these lofty ideals for a period of time. As a form of indirect subsidy, it saw petroleum products being bought below market rates and the government paying the difference to maintain a fixed rate, regardless of fluctuating international rates of oil prices. Yet, acute lack of openness in the very vague modus operandi of Nigeria’s oil company, the NNPC, meant that it was relatively easy for corrupt officials to seize the opportunity to fleece the country under the aegis of a subsidy regime, in collusion with certain elements on the corridors of power. Stealthily and steadily, the figures were cooked to rebudget quire more millions to keep the subsidy going to the point of absurdity. It was not long before questions began to be asked about the wisdom of continuing with the scheme. At the turn of the millennium, we were told that taxpayers needed to cough out about $2 billion annually to keep operating this wasteful subsidy scheme. Yet, when the then Olusegun Obasanjo administration (1999-2007) removed oil subsidies, there was such hue and cry from activists, labour and trade union leaders and a large section of the Nigerian population whipped into a frenzy by the immediate consequences that the removal would undoubtedly evoke. President Umaru Yar’Adua, Obasanjo’s successor, reinstated the subsidy regime, following protests by labour unions and civil society groups. These and similar protests have effectively delayed what appears to be an inevitable move in the near or remote future. Dr Goodluck Ebele Jonathan, who became president after Yar’Adua’s death in office, also faced widespread protests for daring to remove the subsidy based on international market realities in 2012. Instead he was forced to settle for a marginal increase of pump prices from NGN65 to NGN141.
As the costs of petroleum products continued to rise, the strain on the common man’s pocket only worsened. The continued use of international rates for petrol, as was the common practice in the majority of countries around the world, left Nigerians having to increasingly pay more with the rising international rates
Then, the incumbent administration made a bold move by removing the subsidy on petrol from the 2016 budget, only to restore it even without appropriation for it by the National Assembly. Except for a brief period in 2016 and 2020, from March to November, when the worldwide price of crude oil fell and pump prices were reduced from N145 to N125 per litre, Nigerians have had to pay more for fuel. The price again rose to N165 in 2021 as a result of a rise in the price of crude oil in the international market. The real amount spent on the wasteful petrol import subsidies in 2021, which was not appropriated by the National Assembly, is unknown to the general public. What is known, however, is that between February and September, the government spent an estimated N864 billion. This “financial flow” is incompatible with the realities of an economically distressed country and a federal government with an ever-increasing debt profile (N29.46 trillion as of June 2021), as well as a snowballing deficit (N5.6 trillion in 2020 and N6.62 trillion in 2022, as envisaged). It is clear that we cannot continue to protest against the cancellation of this subsidy scheme, especially after Finance Minister, Zainab Ahmed, accurately labeled it “unsustainable” in the summer of 2021, based on the fact that the subsidy scheme cost USD7 billion to operate. I believe that the government must come to terms with the widespread corruption that has bedevilled the subsidy regime, where its own 2019 audit of the NNPC’s books by the Accountant-General and Auditor-General of the Federation discovered that in the year under review, NNPC lifted a total of 107.24 million barrels as domestic crude, out of which it could only account for 2.76 million barrels, with as much as 97.4 per cent (104.48 million barrels valued at NGN2.112 trillion) of the total domestic crude lifted and paid for were unaccounted for. Without delving too far and regurgitating other instances of the scam that is oil subsidy in Nigeria, like the Malabu scandal and the USD 26 billion that were sunk into the nonfunctional oil refineries in the country, what should be completely unambiguous now is that only the ignorant will back any instance of this subsidy regime as it presently operates. If the majority, who protest politically-calculated moves to remove subsidies, had an inkling of the overwhelmingly corrupt background and inner workings of the subsidy scam, they would be leading a campaign to get it scrapped and removed entirely. Yet, who can blame them? The average man is the one who feels the pain anytime there is a fuel crisis, just as it is currently the case across the country. That is why, in my opinion, a more direct course of alleviation for the masses must be charted so that those who are going to be most affected by any impact from the removal of oil subsidy will benefit, instead of cartels, shady government officials and cloaked vested interests. For a more focussed alleviation project, the government should unburden the taxation of those who pay payroll tax. This will go directly to the pockets of the common man in a way that will be felt. Similarly, by reducing Value Added Tax (VAT) from 7.5 per cent to 7 or 6 per cent, the government will be putting money back into the pockets of Nigerians. Providing effective, yet cheaper means of mass transit, is another way to ease the effect of the removal of oil subsidy. These are viable options for the government to reach those who need its attention most. By removing crippling stumps like road tax and offering tax holidays, while reducing or eliminating taxes on goods and services that the average man was struggling to afford, the government will definitely demonstrate that it is serious about lifting the burden of oil subsidy removal from the shoulders of those who will bear the most brunt. An enlightening programme of why this is necessary to end the oil subsidy scam, will bring the light of knowledge to the majority of Nigerians to keep them from returning to the streets in protest while clear plans are made for the trillions of naira freed up with the removal to be ploughed back into the economy to facilitate economic growth and provide employment.
Why Did DCP Abba Kyari Throw It All Away?
Anyone still living in denial of the existential and fundamental problem that Nigeria is currently facing needs none other than the alleged drug bust involving the countrys most celebrated policeman, Abba Kyari. As the story goes, the Deputy Commissioner of Police was arrested on Monday by the National Drug Law Enforcement Agency (NDLEA) on charges of assisting a drug cartel operating on the Brazil-Ethiopia-Nigeria route. Since the news broke, two more police officers, who were working under Kyari in the Special Police Unit, Assistant Commissioner of Police, Sunday Ubua and Assistant Superintendent of Police, James Bawa, have been
suspended as the investigation continues.
The important take-home from this grace to grass tragedy is one that should force a countrywide soul-searching because of the deeper implications that it bears for the kind of country that we all aspire to belong to. Far from glossing over the individual case of a police officer gone rogue, we need to ask ourselves very cogent questions as to why a cop with as much promise and prospects as Kyari had going for him would decide to throw it all away for 25 kilogrammes of cocaine? What will possess the most celebrated policeman to flush down the drain all the goodwill that he painstakingly gained overtime? What will induce a decorated officer considered to be the face of contemporary Nigerian policing to sacrifice his future on the altar of crime and easy money?
Perhaps, if we give these questions considerable thought and try to reach for fact-based answers and possibly more questions, we will begin to piece together a realisation that deeply entrenched in our contemporary psyche as a country is a mentality that must be exorcised, if we are to make progress realisable as a country any time soon. What demons will possess the crime-busting head of the intelligence unit of the police force, famed for ending the criminality of the notorious Abiodun Ogunjob-led robbery gang, Godogodo, in 2013, which had held sway in South-West Nigeria for 14 unbroken years to take to crime himself? Why will the mind that orchestrated the arrest of kidnapping gangs in the South-East and Rivers State that was led by Henry Chibueze (fearsomely known as Vampire) in March 2017, the apprehension of Chukwudi Onuamadike, the notorious billionaire kidnap suspect, popularly called Evans and Taraba’s wanted kidnap kingpin, Hamisu Wadume, consider a turn to the life of the underworld?
Kyari had the media at his behest and the country at his feet. In April 2016, the DCP was honoured with the Presidential Medal for Courage and two years later, he was declared 2018 Africa’s Best Detective, while the Silverbird Group conferred on him the accolade of Best Officer of the Decade.
In recognition of the distinction with which he was carrying himself and the honour he had brought to his home state, a street in his hometown of Maiduguri was named after him. There was more to come.
Kyari received a standing ovation at a session of the House of Representatives in June 2020 for his exceptional work in the fight against criminality. No other police officer had ever come close to receiving such an honour. He was marked for the top and he was going places hitherto believed to be implausible for the corrupt cadre of the Nigerian Police Force. Perhaps to underscore the “Police is your friend” tag, he took an increasingly ostentatious posture on social media, consistently uploading pictures of himself in regular settings with common folks, which gradually became grandiose.
He demonstrated a flair for high society and loved to be seen with celebrities and those with enough money to throw around. That was how he became a familiar face associated with Ramon Abbas, more popularly known as “Hushpuppi”. Until Hushpuppi’s arrest by the Dubai Police in June 2020 and subsequent extradition to the United States to face criminal charges, the Nigerian Instagram celebrity allegedly laundered money obtained from business email compromise frauds and other scams, including schemes that defrauded a US law firm of about $40 million, illegally transferred $14.7 million from a foreign financial institution and targeted to steal $124 million from an English football club.
It was involvement with such dubious characters that resulted in the first chink in Kyari’s pristine armour as an exemplary cop. Linked with Hushpuppi, based on acquired confessions from the fraudster, Kyari’s initial attempts to defend himself did not measure up and before long, he was suspended by the Inspector-General of Police, Usman Baba, pending investigations into his involvement in Hushpuppi’s criminal activities. He was still under suspension when the NDLEA net trapped him with audiovisual evidence that presented a watertight case against him.
The fact we cannot escape in this narrative is that there is a fundamental flaw which has ruptured the moral fabric of our society. For an individual of such standing and prospects to seek an alliance with the underworld of criminality, against which he had so courageously battled, boggles the mind to no end. Was he seeking to secure a retirement plan? Was he looking to guarantee a life of grandeur for himself and posterity, which he felt was not certain within the framework of his government post? Were there no character safeguards in his upbringing that could have kept him going on the straight and narrow path and keeping him from losing sight of which side of the law he stood and represented?
As with such queries, there is often a direct link to be drawn to upbringing, nurturing and family.
As the basic unit of society, the health of the family can be used as a barometer to check the health of the society. Vice versa, the despoilation of the society is a most obvious pointer to the desecration of the family as a bed for nurturing the values that will help society maintain values of honesty, accountability, responsibility and forthrightness in the face of all odds.
The takeaway from the sorry tale of Kyari’s unfortunate turn must be for all of us to look inwards and ask ourselves some of these questions that challenge us to think of the deep moral and existential issues we all must face today, as individuals and as a country, as we strive to be the type of people we want to associate with in the type of country we want to live in.