African viewpoint: Nigeria's unhappy new year

An unidentified man protests on a major road in commercial capital during a fuel subsidy protest in Lagos, Nigeria, Tuesday 3 January 2012

In our series of viewpoints from African journalists, writer Sola Odunfa considers why Nigeria's poor especially feel so angry and exploited by the government's removal of a fuel subsidy.

An economic and political theory is playing out in Nigeria over the entrenched corruption in the country's petroleum sector as workers begin a nationwide indefinite general strike against the government's total deregulation of the pump price of petrol.

Labour and civil organisations say they will shut down all public services, including air and sea ports, to demonstrate popular opposition and anger at the new policy which has more than doubled the price of fuel - a policy they say is insensitive to the impoverished state of most Nigerians.

Start Quote

Governance is not a popularity contest”

End Quote Sanusi Lamido Sanusi Central Bank governor

Hardly anyone faults the government's argument that the national treasury cannot afford the estimated $8bn (£5bn) being paid each year to faceless importers to subside the pump price of petrol, but everyone counters that the government should first find out how legitimate is the amount being paid.

The government's position today seems to be that if it is losing huge legitimate revenue to an untouchable cartel, that government should tax Nigerians to the extent of the amount being stolen by the barons.

That theory is believed to have been sold to President Goodluck Jonathan shortly after his election early last year by his Finance Minister Ngozi Okonjo-Iweala because she came directly from the International Monetary Fund (IMF), the proponent of subsidy removal from everything in the developing world.

'Defenceless masses'

The consequence of his conversion to the theory was the president's New Year gift to Nigerians in the form of the sudden withdrawal of the government subsidy and immediate doubling of the pump price of petrol across the country.

Nigerians had for long demanded information on the volume of petrol being imported, from where and by whom, but the information remained an official secret - like seemingly everything else in the operations of the Nigerian National Petroleum Corporation.

Nigeria's fuel prices

  • Previous price in petrol stations: $0.40/ litre
  • New price in petrol stations: $0.86
  • Previous black market price: $0.62
  • New black market price: $1.23
  • Annual cost to government of subsidy: $8bn

Only in December did the government raise an alarm that the subsidy on petrol price had quadrupled in the preceding 10 months without evidence of a commensurate increase in the petrol imported and distributed.

The conclusion was that a cartel was fraudulently collecting the subsidy - and billions of dollars - for petrol not imported.

Labour unions and social activists launched a campaign for government to investigate the scam and prosecute those involved. Nothing was done.

Instead, government countered with the scare campaign that the national economy was on the verge of total collapse and the only way out was to stop paying the subsidy immediately.

The popularity of President Jonathan dropped dramatically nationally, except in his home, oil-rich state.

Sadly, this is the time Nigerians need solidarity to confront the enormous security challenge posed by terrorism.

Central Bank of Nigeria governor Sanusi Lamido Sanusi replied to the popularity question at a Town Hall Meeting in Lagos by saying: "Governance is not a popularity contest."

If the government decided to do anything which it believed would be in the interest of the people despite inflicting initial hardship on them, he said, it should go ahead and do it, not minding its unpopularity.

A Protester set fire on a major road in commercial capital during a fuel subsidy protest in Lagos, Nigeria, Tuesday, Jan. 3, 2012. There were violent protests against the subsidy's removal last week

I ask, how much more hardship can Nigerians bear when already there is no electricity, no potable water, no security, no roads, no employment, no efficient medical establishments, no good public schools and food prices are rising almost daily?

Radical lawyer Festus Keyamo said last week in a public comment that the government had finally admitted by the subsidy removal that it could not confront the individuals responsible for the corruption in the oil sector, "instead it was pouring its venom on the defenceless masses".

Last week, big rallies were staged against the subsidy removal in several cities across the country.

Although peaceful, the rallies were forcibly dispersed by armed policemen with tear gas. One person was killed.

The killing has further fuelled public anger against the president, whom they voted overwhelmingly into office nine months ago but now denounce in strong language in talk shows on independent radio and television stations in nearly all cities.

Strangely, it is the government ministers and the Central Bank governor who have been campaigning across the country for the new government policy.

President Jonathan himself has cocooned himself in State House. Two days before the strike, he defended his move in an address on national television, saying "the pain" was "in the best interest of all Nigerians".

But so far, it has not been a happy new year for the Nigerian people.

If you would like to comment on Sola Odunfa's latest column, please use the form below.


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  • rate this

    Comment number 34.

    President Jonathan's Government has no moral leg to stand on by asking Nigerians to trust him on this. Obasanjo left about $32bn in the kitty and all this disappeared in 4yrs, 1 of which he was in full charge. That is a rate of $8bn per year. What is there to show for that cash?

    The President is afraid to take on the few rich guys but not the masses. What a cheek?

    Nigeria needs this to mature

  • rate this

    Comment number 33.

    Who are the faceless important being paid $8bn for importing noting to Nigeria?
    Why the impoverished 99% of Nigerians should be required to pay for the irresponsible and treacherous behaviour of the 1% so called ‘faceless’ and ‘untouchable’ Nigerian or foreigner?
    What is making them faceless and untouchable?
    Is Ngozi Okonjo-Iweala working for Nigerians or for IMF?

  • rate this

    Comment number 32.

    For d betterment of this nation our orientation,think nd mind 2ward d country nd our leaders must be changed. Most of our leaders are animal in human flesh. Who is who? our president, d senators nd honourables can not do it. Nigerians let us go back 2 GOD ALMIGTH 2 direct nd govern this countryn. Bcos, people are dying.

  • rate this

    Comment number 31.

    Nigerians leaders always come up with absurd excuses. If you cannot do anything with 30 billion dollars you are unlikely to do anything with 8 billion. The fact of the matter is that Nigeria has been ruled for too long by an irredeemably corrupt and wilfully incompetent leadership whose stock in trade is to make empty promises to the people. Nigerians are now waking up and saying: Enough.

  • rate this

    Comment number 30.


  • rate this

    Comment number 29.

    Am a 34 year Old Middle class Nigerian, and Like most Nigerians, i am not dumb, we know what is happening in our society and because we choose the route of peace and tolerance our govt have taken us for granted. First renew the refineries, develop other source of renew, this would strengthen our economy and as well create jobs, and less dependence on petroleum, instead of thinking we are fools.

  • rate this

    Comment number 28.

    Another worry is the level of distrust for the government. The corrupt practice involved in the running of the affairs of the nation is atrocious. The question is 'Will the accrual ie $8b from the subsidy removal be effectively used for national development or has Jonathan and his cabals become too greedy that they now want to add a huge part of this money to their private pockets’. A big fear.

  • rate this

    Comment number 27.

    The problem I see in the fuel subsidy removal is that the removal process was not managed properly. Nigerians are very understanding people. The government made a blunder not to have packaged a step-wise removal. The new price is excessive. N15 increase is tolerable bearing in mind that over a period of stipulated time there will be a total removal of the subsidy.

  • rate this

    Comment number 26.

    Why is there subsidy for imported fuel in the 1st instance? Is it no cos we cannot refine our own oil? What hasthe government done to ensuing our refineis work as well as building new ones, are we going to be forever importing fuel now? This government has no shame & pride, cos if they did,shrewed investment will be made in our refineries that will create jobs, & IMF will be told to go elsewhere


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