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Wednesday, 11 January 2012


Subsidising goods and services is one of the many ways to redistribute wealth – without which many segments of the population would suffer. In western nations for instance, one of the ways government redistributes wealth is through social programmes, i.e. supplemental security income; food stamp programme; vocational rehabilitation; medical assistance; aid to families with dependent children, and unemployment compensation. Unfortunately, many of these programmes are non-existent in most developing countries like Nigeria.
Even though the Nigerian government has the financial resources to do so, it seems to lack the capacity and the structure. And the very little it can provide is riddled with corruption, waste, and inefficiency. And ever since oil became the driving force of the Nigerian and global economy, oil subsidy has been one of the few mechanisms government has used to redistribute wealth. Even so, the amount of waste and theft that characterises the system is almost unimaginable.
Subsidy – monetary assistance made by government – to shore up, encourage or stabilise some sectors of the economy and the populace – is, therefore, a good thing. Or, it can be a good thing if properly and efficiently managed. What many people may not know is that the politics of subsidy – especially oil subsidy – is not a new thing in contemporary Nigeria. Since the 1980s at least, the International Monetary Fund and other external organisations and groups of individuals have been nudging the Nigerian government to scrap oil subsidy.
While the pressure to remove oil subsidy eased for a while, it gained momentum in recent years. This has led many people to believe that President Goodluck Jonathan caved in to external demands. Otherwise, how else could one explain Jeffrey Sachs describing the removal of oil subsidy as a “bold and correct policy” even as the intended beneficiaries were complaining about the policy? No doubt a very brilliant and distinguished economist and intellectual, Sachs failed to take the political conditioning, along with the poverty-ridden climate, into consideration.
The consensus abroad is that the removal of subsidy is a good thing; while domestic actors and interests think it is a bad thing. To whom should Jonathan pay the greatest attention? To whom is he responsible and accountable to? If this President thinks he is better off with foreign concerns, then, he is jeopardising his reputation and Presidency.
Now, let’s look at the big picture: whether one agrees with the President’s overall policy or not is actually not the question. His biggest failing was to force it on the people (without adequate consultation and collective approval). Removing the subsidy may actually make good economic sense, but it is a bad political move. Its timing was terrible. Subsidy is not an abstract idea. It is a real life issue that affects the vast majority of Nigerians – majority of whom live on less than three dollars a day.
This time, as with other times, government has failed to make the case for removing fuel subsidy in a manner that makes sense to the people. And so, fuel subsidy must be restored until the people are adequately consulted and fully briefed on the pluses and minuses of its removal. And so, the President should come before the people to own up to his mistakes. He will have nothing to lose in public or in private. In fact, he will grow in stature should he admit to his failing. Leaders make mistakes. Statesmen make mistakes. There is absolutely nothing to be ashamed of! Should he fail to do so, then, he is likely to diminish his Presidency.
Long before this time, what the President should have done – and what his advisers and cabinet members should have counselled – was to invite the National Assembly leaders to Aso Rock for a consultation; talk with members of the civil society; and directly address the people in town hall settings and through the media. If he had done the aforementioned in good faith, the ongoing brouhaha could easily have been avoided. He should also have given the people enough time to digest the new policy. Why was he in a haste on this matter?
In all of these, what pained the people the most was the timing of the announcement. You don’t make such an announcement when millions are away from their homes and sources of livelihood (for Christmas and New Year celebrations). It showed a President who didn’t give a hoot about the people’s feelings and sensibilities. And so, even if the policy made good economic sense, the timing – and the President’s subsequent pronouncements – made very lousy politics. This is another in a series of miscalculations.
It bears stating that unless the President is ready to go to war with the people, he’d be wise to reverse himself on this issue – even if temporarily. July or August would be a good time to revisit it. In the intervening period, he should: (a) address the nation on what’s going on; (b) reverse himself and also offer an apology to the people; and (c) be frank with the people: let them know that the reversal may be a temporary move. (The break will help cool down the heat that is threatening the nation’s political space.) What I am suggesting is that the President should “reset the consultation button.” Stubbornness comes with a price.
As I said earlier, the President will gain more, and will also increase his prestige by acknowledging his mistakes, and by reversing himself. If not, how many flames can one man or one President handle simultaneously? As it is, he is lost in the Boko Haram labyrinth. Is he ready and able to take on additional flame?
Whether in private or in public dealings, communication is very important. Jonathan could get a whole lot done by communicating effectively in person and through the media. Nigerians may be an impatient group of people. And, why not? They have the right to be considering the political and economic hell successive governments have taken them through. But Nigerians are not inconsiderate. They would have gone along with him had he made his case before them, and had he given them the time to think it through. And so Mr. President, please reverse yourself! Doing this does not, in any way, make you a weak president. Instead, it makes you a listening and compassionate leader.