Certainly, this is not the best of times for Nigeria and Nigerians. The difficulties unfolding by the day are severe and touching on the very basis of the existence of the citizens. Reforms and radical changes are often accompanied with pains and stresses, but the question to ask at times like this is always about the source and the likely result of possible endurance.
Are these reforms by the Tinubu administration internally original or are they adherence to specific instructions by some foreign economic powers? I do believe that the Nigerian economy was ran recklessly aby the ruling class in the last several years and certain to say that the nation has been unable to take advantage of the vantages the transition from the mixed economy system it has practiced since independence to a capitalist society it intended to be after the collapse of the bi-polar international order.
I equally believe that the political and economic decision-making process in Nigeria has failed woefully in taking theadvantages of oil resources and abundant human capital available to advance the course of humanity in the country. Despite these riches, Nigeria remains one of the poorest with low level development if any and tremendous failures in virtually all fronts.
It’s so sad to note that sixty three years after independence the quality of life of the people continues to depreciate while cost of living keeps rising thereby resulting in difficulties as manifesting in the anti-social activities beclouding the entire nation by way of insecurity from the fringes of the north down to the south and if care is not taken, the problems that lie in the future would make the difficulties and problems of today look a child’s play.
My teachers since the late 1970s have taught me and I believethat any reform in the context of the national economy of the third world nations like Nigeria that is supported, encouraged and appreciated by the international capitalist order as represented especially by the Washington consensus group is suspect and not in the interest of the peoples of these countries. When African leaders are engaged in reforms that the western world is critical of, be rest assured that these leaders are on the right paths, and they likely would not last long in government. I want to think but don’t want to believe that this is the problem that Nigeria finds itself in yesterday and today.
I always believed that the pricing of petroleum and other energies in Nigeria was unrealistic, I thought that it was important to evolve ways and means that Nigerians would pay competitive market price for energy especially fuel consumed daily in a manner that the people would ginger growth and development in the economy. My support for removal of subsidy on petroleum products for instance was informed by the belief that the government would play a leading role in the determination of the value of the nation’s currency, the Naira.
Unfortunately, the economists in our midst have continuously convinced the ruling class and falsely too that it has little or no role in determining the value of the currency, and that it is the level of production in the economy and foreign reserves that would continue to determine the value of the naira. True to that, Nigeria’s industrial capacity continues to deteriorate so is its foreign reserves shrinking. The meaning therefore is that the Naira would keep sliding in the market and here we are with a currency that is weak and continuously losing value in comparison with other foreign currencies especially the dollar. This school of thought has eliminated the role of ‘the political decision maker’ in the determination of the value of the currency. This extreme over reliance on economic theory(economisticism) is mainly responsible for the problem.
Is it possible to continue to remove subsidy on energy in theface of a dwindling currency? When President Buhari early in his administration decided to remove subsidy on petroleum products, we were told that the price that we paid for fuel was to be determined by the price of oil in the international market regardless of the fact the country was amongst the ten largest producers of oil in the world whose refining capacity was and is still almost zero.
The magic is not in the continues removal of subsidy on the products, it is more on the hectic instability in the price of the naira. For instance, when President Tinubu came in May 2023, the official exchange rate of the naira to the dollar was in the four hundreds while in parallel market, the price in the seven hundreds. Many people thought the decision to do away with the dual exchange system was the solution to the hi-tech rentier system that the nation faced. Unfortunately, what seem to be the rule today is that we are back with even a more frightening situation because while the official exchange rate stands between seven hundred to a dollar, the parallel market exists in the region of over a thousand naira to the Americandollars. Where are we heading to?
The message here is that as it stands, the subsidy removed at the end of May 2023 is no longer the reality of how much fuel is imported in the country. It means that the government has reversed itself and its now paying subsidy otherwise Nigerians would buy a liter of petrol for about a thousand naira in the current exchange rate regime and how foreign exchange is sourced by those who import fuel. The massive corruption in the import racket is therefore back.
Nigeria is still the same country which imports what it has in very large quantity and exports what it doesn’t have. This was the definition the country had during the Abacha regime when it was exporting democracy to Liberia and Sierra-Leone and importing fuel into the country, a resource it had in large quantity.
Every government that came and went told us that the refineries would be revived. Billions are said to have been spent but still none of them is working. While we were toldthat the ones in Port Harcourt and Warri would work in 2023, a Presidential Advisor-on tax reforms was reported to have said that Nigerians should be lucky that the refineries are not working! What economics is?
It seems the confusion of the nation continues unabated despite changes in leadership and passage of time. Some of us had high hopes in the beginning of the Tinubu administration but it will appear we either did not understand in correct context the configuration of the administration or have fallen victims of the mystification of time and age. Perhaps the Tinubu that was in our minds was the 47-year-old Lagos Governor who transformed that state into an economically viable entity in early two thousands and now that he is in his seventies, time and age with their huge liabilities have taken over.
I want to think that the administration has started rather wrongly and need a re-strategization to correct these initial mis-starts so that the hope that millions had would be restoredand assured. True! There is no gain that comes without pain,but the pictures of the future aren’t looking any bright in view of the seeming further slide into economic abys that Nigeria is undergoing.
Hope is the mantra of this government and let hopelessness not be the dominant feeling of the people as all indicators in reality suggest difficulties Ian’s hard times. I hope the president is in control and fully on ground to try the Lagos magic of the early years of this dispensation so that Nigeria can bounce back. No nation survives high cost of energy if it desires the development of small-scale enterprises industries and even the larger ones.
The Nigerian situation seems to suggest a catch twenty-two situation of between the devil and the deep blue sea. Government wants industries to produce, small scale businesses to thrive and yet allowing market forces to determine the cost of energy. I doubt if this way will lead to greater productivity.
Several schools of thoughts are of the view that the high cost of subsidy especially on fuel we consume isn’t necessarily because of the large imports in relation to price, but primarily the notorious activities of the cartels that have taken over the sector and reaping and soaking the nation dry. Reports over and over have shown that there was over billing and recyclingof cargos for multiple payments each time fuel was imported. A ship we are made to understand was made to berth several times while bills of laden were collected and multiple payments made resulting in the high cost that was recorded.
The argument therefore is that in truth, the choice before the government is on either to stop the racket or withdraw subsidy payment. Somebody must be the victim and the other beneficiary of policy. In the Nigerian case, the ruling class opted to make the mass of the people pay for the economic crimes of the few.
What is certain today in Nigeria is that all is not well. A choice made openly by the Tinubu government to defend the rich against the poor. I am of the view that it is too early morning for the government to be so obnoxious in the abuse of privileges of power.
Mr Mato, Ph.D (ABU), writes from Abuja