Nigeria when mentioned brings to mind a country known as the most populous in Africa, a nation blessed with natural resources such as rubber, timber, and most especially oil making it one of the largest producer of oil in Africa and the sixth largest exporter in the world. While Nigeria is blessed with natural resources, its citizens for decades have been deprived of the opportunity to share and benefit from its vast minerals.
Recently, the government of Nigeria announced it is removing the subsidy on oil which for years has allowed the people to afford the rising gasoline prices. Those subsidies have kept fuel prices cheap in a country where only the rich see the direct benefits from Nigeria’s oil wealth. For those who wonder why the subsidy? The answer is without the subsidies on oil, the result would be extreme poverty for some sections of the population who barely survive on a very low-income.
The subsidy is a form of assistance given by the government to a business or economic sector as subventions in an industry, to prevent the decline of that industry or to prevent increase in the prices of the products manufactured by the industry. An increase in prices means a decrease in demand as people will begin to feel the impact making it impossible to afford the products. In the case of oil, a removal of the subsidies will drive up prices of the most basic human needs such as food, vegetables, cooking oil and other necessities of life which Nigerians crave daily.
The past few years brought Nigeria to the headline after the unsuccessful attempt by the “underwear bomber” Umar Farouk Abdulmutallab, to detonate a bomb on a flight en route from Amsterdam to Detroit Michigan on December 25, 2009. After the event, the government of Nigeria has blamed other terror activities on Boko Haram a so-called terrorist organization, claimed to be responsible for series of attacks in the Northern parts of Nigeria. What the Nigerian government is failing to admit though is the fact that the protests and the series of activities are a result of poverty and the culture of corruption which is a way of life in the Nigerian leadership.
Since gaining independence from the British on October 1, 1960, the citizens of Nigeria have known nothing but corrupt leadership. They have watched as those that are in power both elected officials and the military, steal from the public treasury and accumulate wealth at the expense of the people. Rather than fight poverty and make life better for struggling Nigerians, the President Mr. Goodluck Jonathan is now depriving the population of their basic needs through subsidy removal.
The question analysts here in the United State and in Europe are asking is why the Nigerian government is suddenly pulling the subsidies when facts show that the nation still generates income daily from the export of oil. The move according to some may be because the country is running a deficit which may be a result of corruption which for so long has allowed politicians and elected officials to divert project funds to their private and personal use.
According to the government, it would stop paying gas subsidy to importers effective immediately and use the savings of about $8 billion generated for investment on the building and construction of much-needed infrastructure. The question is what infrastructure is the government building now that it has not embarked on in the past?
Whoever knows the history of politics in Nigeria will understand there is a culture of taking up projects and not finishing them. Rather, the funds for such projects are funneled to indigenous banks and foreign accounts owned by corrupt politicians entrusted with such projects. Any new project designed for success should not be at the expense of sacrificing the basic needs of the people; it is nothing but an indication of another attempt to distribute the public funds in the form of projects among the few politicians.
Few Nigerians have seen the benefits of the country’s oil wealth over decades of production; those who dare speak are silenced with imprisonment and depending on the situation the ultimate punishment of the death penalty. Those who doubt such should refer back to the killing of Ken Saro Wiwa, a member of the Ogoni who through his Political Movement for the Survival of the Ogoni People, was arrested by the Nigerian Military government of General Sanni Abacha and later executed in 1995 by hanging; his sin for protesting against mismanagement of oil funds and environmental degradation.
Many in Nigeria survive on the little they earn, some live on less than $2 a day and there are some that are extremely rich. However, a removal of the subsidy will not only affect the poor but the rich as well; the rich business owners will see demand for their goods and services fall and the poor will find themselves unable to afford those goods and services. So far the subsidy removal saw gas prices rise from $1.70 (45 cents per liter) to about $3.50 per gallon (95 cents per liter) which normally, is a rate too high for struggling Nigerians.
Considering the current situation, it is time for the U.S. and Britain the major purchasers of Nigerian oil to reconsider their dealings in Nigerian oil, if the government can’t provide the basic necessities for its own people. The country a member of OPEC produces about 2.4 million barrels of crude oil daily; it is a top supplier to major countries generating billions in oil revenue but still, people suffer due to lack adequate electricity and water.
Over two decades ago, the Ajaokuta electricity project started as a source of generating adequate power for the nation however, it is still under construction to date while money meant for the project has disappeared. There is a brain drain of Nigerian youths and experts leaving the country for better opportunities abroad, because they are fed up with the way the leadership is running the nation.
University Professors and academicians continue to earn less while their foreign counterparts are paid more and exposed to better opportunities. Medical practitioners that could have help develop the field of medicine, are also leaving for foreign practice. The politicians on the other hand continue to enrich themselves while the rest of the nation suffer; the likes of Ibrahim Banbangida, one of the most corrupt former Military Head of State continues to have a say in Nigerian politics, and now, the current President Mr. Goodluck Jonathan is removing oil subsidy.
No one should be deceived, the economic situation in Nigeria is a result of government corruption. However, Boko Haram is a huge Security problem. In Nigerian Christians and Muslims have lived among themselves for decades; the group known for its rhetoric that “western education is a sin” is a self-proclaimed Muslim sect calling for the implementation of Sharia law and so far, the group has carried out many executions in the country.
Recently, I saw a video in which Boko Haram beheaded a Nigerian which removes skepticism about its structure and chain of command. Even though, there are reports other groups are engaged in atrocities in the name of Boko Haram, there should be no doubt about it’s existence as a terrorist organization. Therefore, Boko Haram is a security problem in Nigeria.
Nigerians are among the most loving and peaceful in the world; they are religious people of faith who are taught to persevere in the midst of difficulties however, for decades the leadership in Nigeria both military and civilian has taken advantage of the resilient and peaceful nature of its own people.
The clock is ticking, Goodluck Jonathan must leave the subsidy in place or else, there may be another side of the Nigerian people yet to be seen and which he does not want to see. Nigeria is not immune from the Arab Uprising; strong will of the people drove out the Babangida regime in 1993, it may happen again unless there is a positive change.
Dr. Adeyemi Oshunrinade [E. JD] is an expert in general law, foreign relations and the United Nations. He is the author of ‘Murder of Diplomacy’ (2010) and ‘Wills Law and Contests’ (2011); a Nigerian/American living in Brooklyn New York. Follow on twitter @san0670.
Categories: Economic Dilemma, Humanitarian
Gettysburg Institute Post 
Thank God you have been part of the Nigerian system and do know that the system has failed. The issue of Subsidy as addressed or presented by the so called World bank Former Managing Director Okonjo Nweala and Mr Sanusi Lamido the Central Bank Governor on T.V gives you an academic and if i may use the word, a holistic view of the need for subsidy. From their presentation, their argument was premised on price fixation,like you have in the socialist clime. This price fixation according to them encourages illegal exportation to neighboring west African countries where PMS sells at prevailing market prices.
The argument has been. Why is this product not produced locally? or why are the refineries not working to ensure local consumption is met? Government has been quick to add, that this is not the case because at the subsisting fixed market price, no investor will go to the sector. Hence the need for deregulation. According to them too about 1.3 trillion naira is annually paid for subsidy and this encourages the importers to milk the economy through their corrupt practices.
Government plans to distribute the accrued unpaid subsidy to state governments; So that they can have enough money to either “steal” or build infrastructure. They are also to use the money to be able to pay the minimum wage and “create” employment. The minimum wage of 18000 naira has been implemented since last year but has not been paid.
The Jonathan administration gave the impression that though subsidy is suicidal and encourages corruption , he would still allow the debate. Implementation according to government commences April 1st 2012 after deliberations have been concluded by Nigerians, and the house of Assembly’s investigation into the fraud has been unearthed. The house has commenced investigation and has discovered a lot of fraud, which they have unearthed, the supposed deliberations is on going, senate has gone on recess, then Jonathan with the support of the cabal removed the subsidy without recourse to the PPRA (PETEROL PRICE AND REGULATORY AGENCY ACT) and without the assembly’s nod or resumption after the end of year recess.That is also against the promise to allow alternative views and senate finish her investigation. Also in the budget presented to the house, subsidy has been removed even before the National’s assembly’s assenting the bill…
Without attending a logic school the conclusion would have been inferred from the arguments posited above… we are doomed except God intervenes. I don’t believe the West is capable of anything, the West has an avowed interest in Nigerian polity and its conspiracies, its either we fight it out our self or God takes control
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Thank you very much for your insights on the state of things in Nigeria. There is no doubt the subsidy issue is yet another scam and a way for the politicians to enrich their private accounts. What infrastructure do they want to embark on that has not been done in the past? I bet if the subsidy is implemented, the government will invest on projects that will never complete however, their friends and family members will get all the contracts and pocket the funds. Enough is enough; Nigerians must stand up and fight this circle of corruption in the government.
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