Fuel Subsidy And The God of Jonathan
One of the first things that had been cited as evidence of President Bola Ahmed Tinubu showing courage and wisdom and hitting the ground running as the 16th President of Nigeria, has been his announcement that “fuel subsidy is gone”. In his inaugural speech on May 29, 2023, he did not state how but within 24 hours, his rather speculative declaration was given effect. Oil marketers and managers at fuel stations adjusted their operations, shifting prices per litre of petrol upwards. By the following day, the NNPC Limited, the country’s sole supplier of finished product had announced a new template for petrol pricing, from N195 per litre to between N480 and N570 per litre - a more than 200% adjustment in the pump price of petrol. The given excuse is that this is in fulfilment of the All-Progressives Congress (APC) promise during the campaign season in the lead up to the 2023 General elections. The APC was not alone. Indeed, fuel subsidy removal was one of the major issues in the 2023 campaign process. Virtually every major political party promised that the subsidy would be removed.
The IMF/World Bank in their global outlook for Africa and Nigeria had also advised against retaining fuel subsidy in Nigeria, being a source of wastage and leakage. Nigerian economists also agreed that the subsidy regime was unsustainable. It benefitted only the rich and was a ready source of arbitrage and a vehicle for the smuggling of petrol to neighbouring countries. The subject also gained a legal imprimatur with the passing of the Petroleum Industry Act (PIA), whose express purpose was to introduce a legal and governance framework to guide activities in the oil and gas sector. By the tenets of the PIA, the subsidy regime was meant to go by 2021.
Citing what he called “social consequences” that may arise from such action, the Buhari administration, literally postponing the evil day, got the National Assembly to shift the implementation of that part of the law till 18 months later, to coincide with the end of his own tenure as President of Nigeria. As that administration began to wind down, the then Finance Minister, Zainab Ahmed continued to remind Nigerians that Nigeria would not be able to fund fuel subsidies beyond May 29, 2023. The extension granted under the two relevant laws, the Petroleum Industry Act (2021), and the 2023 Fiscal Framework and Appropriation Act could not be stretched legally beyond May 29. To do so would be to break the law. In the weeks leading to the end of that administration, we were further told that the outgoing government had decided that the incoming administration should join the Federal Government to take a decision as to what it would do.
In the weekend leading to the Inauguration of the new administration on Monday, May 29, the National Assembly hurriedly met: Senate first, followed by the House of Representatives to pass amendments extending the 2023 Supplementary Appropriation Act till December 2023, and another Bill amending the Central Bank of Nigeria Act, to give effect to the criminal violation of Section 38 of the Law on the approved threshold for Ways and Means. The Bill as passed moved the threshold from 5% to 15%. Till he handed over the instruments of power, there was no information that Buhari had signed either of the two Bills. He left for Daura, with a promise to cross the border to neighbouring Niger, if anyone tried to drag him into any Nigerian crisis. As he did so, he left behind a debt burden in excess of N77 trillion Naira, debts owed to the country’s major oil company, the NNPCL, totalling N2.4 trillion, a debt service to revenue ratio of over 96%, an inflation rate of 22.24%, an unemployment rate in excess of 33%, an essentially broke country, whose travails were further compounded by insecurity and hopelessness resulting in the Nigerian invention of a “Japa” phenomenon turning Nigerians into asylum and opportunity-seekers in other parts of the world.
In an attempt to seize ownership of the narrative however, Buhari’s handlers rolled out a number of publications: about four books in which they tried to justify the legacy of the administration, including reports by the Presidential Communication Council (PCC) and the Buhari Media Council (BMC). In a flurry of speeches, the outgoing President himself reminded everyone not to look at the debt overhang that he was leaving behind, but what he did with the borrowings: infrastructure development, reforms, reduction of insecurity, repatriation of stolen loot, the ease of doing business. In more than six months after assuming office, the Buhari administration could not appoint key Ministers or get the government going. The President himself spent more than a year in UK hospitals on medical tourism.
He began his tour of duty with an ear challenge that had to be treated in the UK. He ended it with a toothache that could only be attended to by specialists in the same UK. But in fairness to President Buhari, he finished on a physically strong note. His last two weeks in power was characterized by a burst of youthful energy. The Federal Executive Council approved contracts and memos, in one week – 83!. Legacy projects were launched - the Second Niger Bridge, the Dangote Refinery, housing projects etc. President Buhari left behind a much stronger statement as he departed than he did when he arrived. Many have interpreted this to mean that he tried to set a trap for his successor. I don’t think so. After all, the transition that Nigeria has seen is APC to APC, it is more or less the same party remaining in power even if it is the ACN wing of the APC coalition replacing the old ANPP/CPC wing. The former headed by Asiwaju Bola Ahmed Tinubu formed an alliance with others to get rid of the Jonathan government in 2015. At the risk of sounding superstitious and protean, I think the events of the past week would seem to point to one thing- retributive justice. Karma is truly a bitch. The God of Jonathan would seem to be at work.
In the Holy Bible (1 and 2 Samuel), the story is well told of Jonathan’s faith in God. He did not ascend to the throne because of his father, Saul’s sin, and he may have died in battle at Mount Gilboa, but students of the Word will remember his valiant outreach against the Philistines. He told his armor bearer: “it may be that the Lord will work for us…” (1 Samuel 14: 1-15). In the midst of the onslaught on members of the Jonathan administration in 2015, after the general elections of that year, the persecution was so much by the new administration that people advised President Jonathan to speak up to defend his team or pay a visit to President Buhari to protest. One evening, President Jonathan told me in his library: “Reuben there is no point… after God, it is government and government can do and undo. But what I believe is that our God will fight for us”. The reader is advised to fill in the gaps as you may deem fit, but I have chosen to use the above title, advisedly in reference to that 2015 conversation and in the limited context of the current outrage over the fuel subsidy removal debacle. Outrage is even a simple word in the context of the brewing crisis. My friend and brother, Patrick Obahiagbon, the grammarian describes the emerging situation as “supercalifragilisticcepalalidocious.” I have since given up searching for that word in the English language dictionary, simply because I have a deadline to meet to submit this piece to the editor. But Obahiagbon’s word twists the tongue in the same manner in which current events in Nigeria are twisting the mind.
It is a known fact that in January 2012 when President Jonathan’s administration announced the deregulation of the downstream sector, otherwise known as fuel subsidy removal, the same people who opposed the government and organized protests at Ojota, Lagos, Abuja, Minna, Ilorin, and in other parts of Nigeria, even in London, are the same people who have now since returned to the same original arguments about the non-sustainability of the subsidy regime. When they wanted power, they whipped up sentiments against President Jonathan. At Ojota in Lagos, they carried coffins, they portrayed Jonathan in a derogatory manner, they danced, wore specially made T-shirts, they served designer jollof rice. They called it “Occupy Nigeria.” The Nigeria Labour Congress and the Trade Union Congress were involved and they had the backing of the opposition. There were casualties. The government stood its ground. Then Minister of the Economy and Finance, Ngozi Okonjo-Iweala, now WTO Director-General threatened to resign if the government reversed itself. The CBN Governor at the time, HRM Sanusi Lamido Sanusi was one of the more outspoken defenders of the simple proposition that fuel subsidy was unsustainable. The Jonathan administration had proposed a 120% increase in the price of petrol. Hell was let loose. In Ojota, speeches were made by civil society leaders: Pastor Tunde Bakare, Dr. Tunji Braithwaite and a host of others. Many believed that the 2012 “Occupy Nigeria” protest was a major cause of the Jonathan administration’s early loss of goodwill. It was all politics though. But ironically, the same people who turned the matter into partisan politics, upon assumption of power in 2015, started by increasing fuel price from N87 per litre to N145, later to N195 and they met little or no resistance indicating that the crisis of 2012 was indeed stage-managed. Not too long ago, a man I respect told me that President Tinubu did not sponsor the protests of 2012. But nobody has denied an article in circulation titled “Removal of Oil Subsidy: President Jonathan breaks social contract with the people – by Asiwaju Bola Ahmed Tinubu” (January 11, 2012.)
I am tempted to quote the essay in extenso, but I guess, a few excerpts would be adequate. Tinubu wrote inter alia as follows: “I am not calling President Jonathan an evil man. I do not believe he is perverse. However, the economic ideas controlling him are so misguided and that they have a perverse impact. Because he is slave to wrong-headed economics, the people will become enslaved to greater misery. This crisis will bear his name and will be his legacy. The people now pay a steep tax for voting him into office. The removal of the subsidy is the Jonathan tax. This situation shows that ideas count more than personalities. People may occupy office but how that person performs depends on the ideas that occupy his mind.”
He added: “Though someday, Nigeria will have to remove the subsidy the time to do it is not now. This subsidy removal is ill-timed and violates the condition precedent necessary before such a decision is made. First, government needs to clean up and throw away the salad of corruption in the NNPC. Then proceed to lay the foundation for a mass transit system in the railways and road network with long term bonds and fully develop the energy sector towards revitalizing Nigeria’s economy and easing the burden any subsidy removal may have on the people.”That was Tinubu on the marble.
As a witness to history, I know that before the Jonathan administration announced any deregulation of the downstream sector, the term we used then, he had set up a verification panel to study and advise the government on the subsidy regime. The team under the auspices of the Ministry of Finance was chaired by Aig Aig-Imoukhuede. The committee reported that the subsidy regime was a big scam, the play-field of rent collectors who submit fraudulent claims to the government and that 21 firms had stolen about N383 billion subsidy money. The proposed deregulation was to check rent-collection, inefficiency, arbitrage and smuggling. For these and other reasons, it was submitted that the subsidy regime was unsustainable. Yet another committee was set up to review the submissions of the Aig-Imoukhuede committee. The same conclusions were reached. Then the government embarked on consultations with a broad spectrum of stakeholders. As the President’s spokesperson and media adviser, it was part of my job to take notes and mobilize my team to provide communications infrastructure support. Meetings were held at the main conference centre at the Villa, House 11 and sometimes at the First Lady’s Conference Room. Ahead of the announcement of the fuel subsidy removal as it became known, the Jonathan administration also set up a Subsidy Reinvestment Committee and announced palliatives. Key government officials were given time off to travel to their constituencies to explain to the people that the policy would be in the best interest of the poor.
I have quoted Asiwaju Tinubu at length. Please has he now heeded his own advice of 2012? He was sworn in as President on May 29, and he promptly slammed fuel subsidy removal on the people. Nobody knows when and how, if any, consultation was carried out. The conversation about subsidy removal has been mainly elitist. Nobody has tried to speak to the people, or give them hope, the same hope that is said to be the original mission of the Tinubu administration. Anderson, Brady and Bullock (1978), E. Young and L. Quinn (2002) and Augustine Eneanya (2020) in their analysis of the public policy making process agree that no matter how valid a public policy may be, it is important to secure multi-stakeholder adoption of the agenda to generate a sense of ownership and easy implementation. By dictating to the people on the first day in office, without even any attempt at communication which is central to policy-making, the Tinubu administration obviously misses the theory and the strategy. Trying to intimidate organized labour, or relying on the politics of divide and rule also misses the point. Social problems are complex, they cannot be resolved with arrogance or hypocrisy as has been well-exposed.
Dr. Ngozi Okonjo-Iweala, Peter Obi and Atedo Peterside have reportedly asked President Tinubu to apologize to President Jonathan. Of what use would the apology be in the circumstance? Buhari has thrown the Gordian knot into Tinubu’s laps. He should untie it. The irony is that his own hands are tied. He won’t be able to blame Buhari for the problems of Nigeria as Buhari did to his own predecessor. Act One, Scene One: we will watch as the movie unfolds.