A Short Film “SUBSIDY”
by Capital Dreams Pictures
& Team Capital
Posted on Thursday, January 5th, 2012 at 12:52 PM
By BellaNaija.com
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With the present fuel subsidy removal implementation causing chaos all over our “great” Nation, Nigeria. The individuals at Capital Dreams Pictures & Team Capital, Nigeria’s most formidable visual & media content provider took in upon themselves to show the ugly side effects it can cause on the citizens.
Musician Tha Suspect plays the lead role and the short is directed/edited by X.Y.Z.
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Monday, January 09, 2012
The Fuel Subsidy
Removal Protests
for Dummies
On the first day of the indefinite general strike organised by a coalition between two of the largest unions in Nigeria – the TUC and the NLC – and a cluster of smaller unions and social media-based activists and organisations, some external observers have expressed surprise at the intensity of resistance the “Occupy Nigeria” campaign has mounted against the removal of the fuel subsidy on January 1st and the size of the mass demonstrations taking place. From an outside perspective, it might seem like a dust-devil has been whipped up without why in the desert. In case there’s still any confusion, allow me to explain why there is so much anger and resistance.
The answer begins with a question: would it be acceptable to citizens of affluent countries that the price of petrol doubles overnight without any warning? Perhaps Jeffrey Sachs would be alone in his view, or perhaps he only prescribes a certain type of medicine for African countries. Perhaps the view from Sachs' brain is that Africans can get by on generic drugs long past their sell-by date.
Aside from Sachs' development fantasies, the lived reality of citizens of the Nigerian state is that it provides little or no security, no infrastructure, no education and no employment opportunities (apart from mostly McJobs in the civil service). Everywhere in Nigeria, the basic elements of civilised existence have to be taken care of house-by-house, compound-by-compound. You must sink your own borehole for water, buy, install and fuel a generator for power, hire security guards to keep the wolves from the door, pay school fees to ensure your kids get a half-decent education because the public school system is in perpetual meltdown. And to earn enough money to get through the day, you must hustle.
The breakdown of a standard tax and political representation based social contract between citizens and the state in Nigeria is almost entirely a result of the past few decades of the so-called ‘resource curse’. Earning billions of dollars each year from crude exports, the Nigerian government has no need to rely on tax from individuals or local companies; tax and royalty payments from the international oil companies (as well as historically, loans from international financial institutions) have been sufficient to fund the annual budget at all levels of government. For the past few decades, cheap fuel has therefore been the only form of social contract between ordinary Nigerians and the state and the principle lever to control inflation during times of rising oil prices. With most Nigerians subsisting on US$2 or less, subsidised fuel has also been a survival mechanism, making life only just bearable.
It was therefore highly surprising to Nigerians to find out that the fuel subsidy had been removed on January 1st and that the price regulating body under the Nigerian National Petroleum Corporation (NNPC) – the PPPRA – had more than doubled the price of petrol overnight. No one had been given warning. The expectation was that the subsidy would be removed at the earliest in April. The strong suspicion is that following on from Christine Lagarde’s visit to Nigeria in late December, the government had accelerated its plans. From the views of key government figures, it’s easy to see how Nigeria acceded to IMF pressure with little or no resistance. The Finance Minister, Ngozi Okonjo-Iweala, has repeatedly stated that removing the fuel subsidy would only hurt the affluent car-owning population, forgetting how central the price of fuel is to almost every basic aspect of life here. Meanwhile, the Governor of the Central Bank, Sanusi Lamido Sanusi, has stated that removal of the subsidy would only have a short-term inflationary effect. With opinions like this, the IMF was walking into an open door.
Given the state of the global economy, it is little surprise that the IMF is in favour of insisting on reducing debt wherever it can. However, the IMF also appears to be suffering from institutional amnesia; what is happening in Nigeria is in some respects a re-run of the Structural Adjustment Programme in the 1980s, and President Ibrahim Babangida’s short-term attempts to resist austerity measures. As we will recall, “IBB” ended up creating his own austerity package, which was more severe than that proposed by the IMF. The Nigerian economy quickly tanked, resulting in mass suffering among Nigerians. Fundamentalist strains of evangelical Christianity mushroomed forth from the barren earth. Unlike the World Bank, which is increasingly taking political-economy factors seriously in its analysis and its programmes, even today the IMF and its high-priesthood consultants views the world from the numerical altar of macro-economics. The technocratic nature of the IMF means that the organisation is in fact programmed to forget the past.During the recent fuel subsidy debate on local Nigerian TV station Channels, Mrs Okonjo-Iweala was keen to state what she referred to as ‘facts’. At no point has anyone in the executive effectively challenged former Petroleum Minister Tam David-West’s querying of whether there is a subsidy in the first place, or whether the landing cost of imported fuel has been artificially padded. Given the findings of the recent KPMG report into the NNPC, it seems that facts about the oil sector in Nigeria are thin on the ground.The defence offered by the Finance Minister during that same debate is that the savings from removal of the subsidy would be spent on a palliative capital-spending programme – the Subsidy Re-investment and Empowerment Programme (SURE). Nigerians have raised a number of critical objections to this proposal and the timing of subsidy removal.
Firstly, given the glut of money in state coffers in the past few years and the lack of any successful infrastructural development (for instance in power and transport), there is little guarantee that the SURE programme would be implemented or successful, rather than go the way of all initiatives in the past. The government of Nigeria has not been able to significantly raise the amount of power generated, nor has it been able to achieve the low-tech objective of revamping the dilapidated railway network, still less has it been able to improve standards in public education and healthcare. What then would be different about the SURE programme?
Secondly, while most Nigerians are probably not ideologically opposed to subsidy removal (and targeting the corrupt ‘cabal’ of fuel importers who benefit from the subsidy), they are utterly opposed to the timing, given the insecurity in the land raised by Islamic militancy in the North and the potential for renewed militancy in response in the Niger Delta. A phased subsidy withdrawal, as has happened elsewhere, would have been the preferred approach.
Thirdly, the idea that removing the subsidy equates to ‘deregulation’ and the equivalent private sector boom as witnessed in the past decade in the telecoms sector is highly suspect to most. For the downstream oil sector to be deregulated, there has to be new legislation in place. The Petroleum Industry Bill, which separates the functions of a national oil company, regulation and policy-making, would need to become law. We have been waiting since the previous minister of petroleum for the PIB to be passed. At present, the NNPC is the epicentre of corruption in the oil sector in Nigeria, and has to broken up into its constituent parts for the private sector to be given space to grow its role. In addition, Nigerians would want to see a much higher percentage of crude oil refined locally, rather than the current reliance on imported fuel, to ensure a favourable local pricing policy that does not depend on state subsidy. Without any of these key deregulatory building blocks in place, removal of the ‘subsidy’ now is simply terrible timing and does not inspire confidence among a people who long ago lost their faith in government.
Finally, if savings are urgently required from the annual government budget, most Nigerians would argue that the first place to cut costs is that of the price of running government itself. As the Governor of the Central Bank pointed out last year, the National Assembly consumes 25% of the Federal overheads budget; the cost of running the President’s office has been widely publicised in recent weeks (including a billion naira food bill). It is rare to see a member of the executive - down to director-generals of government agencies most Nigerians have never heard of - travelling without a sizeable convoy of expensive cars. Nigerian government delegations to international conferences and gatherings are often by far the largest, with a supersized retinue of special advisors, assistants and staff for the first-wife in attendance, there to collect their allowance and have access to shopping opportunities overseas.
As it is, most Nigerians are poor, and will simply not be able to survive with any comfort on US$2 a day and a doubling of living costs. That the government of Nigeria didn’t foresee the massive level of resistance happening today is quite bewildering. It shows a complete disconnect and disregard for Nigerians. However, where there is the greatest danger, there is greatest hope. Nigerians have never been so united in years – last week, in the unofficially renamed Liberation Square in Kano, Christians guarded the space as their Muslim co-protestors prayed. In return, last Sunday, Muslims guarded Churches as others prayed inside.
What we are witnessing with Occupy Nigeria is a generational transfer, as young, social-media enabled activists gradually take over the baton from unionist stalwarts. Nigeria's young population is increasingly letting go of the deferential attitude of their parents generation. In the south at least, young Nigerians are beginning to ask questions of the religious leadership that has been complicit with the status-quo. At long last, there is accountability pressure building up in the system.
In the short term, following on from the next few days of protest and shut-down, it’s hard to imagine anything other than a policy reversal, and a planned withdrawal being announced, in step with a clear programme of projects that must be delivered before any further withdrawal of subsidy is implemented (citizens monitoring a re-drafted SURE programme for instance). Even at this very late stage, President Goodluck could become a hero of the process. Come what may, underlying events this week a deeper shift is at work: a new generation of Nigerians well versed in events to the north in Tunisia, Egypt and Libya is demanding that the terms of the social contract in Nigeria are re-written, in favour of increased accountability in political leadership.
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NIGERIA...
UNREST IN LAGOS...09/01/2012
A protester waves a flag on an empty road during a protest against a fuel subsidy removal in Lagos January 9, 2012. Thousands of Nigerians took to the streets across Africa's top oil producing nation on Monday, launching an indefinite nationwide strike to protest against the axing of fuel subsidies.
A protester holds a banner during a protest against a fuel subsidy removal in Lagos January 9, 2012. Thousands of Nigerians took to the streets acrossAfrica's top oil producing nation on Monday, launching an indefinite nationwide strike to protest against the axing of fuel subsidies.
Policemen stand watching labour protest against the removal of fuel subsidy by the government at Ojota district in Lagos on January 9, 2012 during a demonstration against the more than doubling of petrol prices after government abolished fuel subsidies. Thousands of people heeded the unions' call to stage protest rallies across Africa's most populous country. Police shot dead a protester in Nigeria's commercial capital Lagos on January 9 during a national strike over fuel prices.
People protest following the removal of a fuel subsidy by the Government in Lagos, Nigeria, Monday, Jan. 9, 2012. A national strike paralyzed much of Nigeria on Monday, with more than 10,000 demonstrators swarming its commercial capital to protest soaring fuel prices and decades of government corruption in the oil-rich country.
A protester lies on a hospital bed after he was shot by the police during a protest against a fuel subsidy removal in Lagos January 9, 2012. Police shot dead one protester and wounded nearly two dozen as thousands of Nigerians demonstrated against the axing of fuel subsidies in Africa's top oil producing nation on Monday and unions launched an indefinite nationwide strike.
Police watch protestors on January 9, 2012 in Lagosduring a demonstration against the more than doubling of petrol prices after government abolished fuel subsidies. Thousands of people heeded the unions' call to stage protest rallies across Africa's most populous country. Police shot dead a protester in Nigeria's commercial capital Lagos on January 9 during a national strike over fuel prices.
Protesters chant slogans as they march through Ikorodu road during a protest against a fuel subsidy removal in Lagos January 9, 2012. Thousands of Nigerians took to the streets across Africa's top oil producing nation on Monday, launching an indefinite nationwide strike to protest against the axing of fuel subsidies.
A protester stands on a road during a protest against a fuel subsidy removal in Lagos January 9, 2012. Police shot dead one protester and wounded nearly two dozen as thousands of Nigerians demonstrated against the axing of fuel subsidies in Africa's top oil producing nation on Monday and unions launched an indefinite nationwide strike.
Police watch protestors on January 9, 2012 in Lagosduring a demonstration against the more than doubling of petrol prices after government abolished fuel subsidies. Thousands of people heeded the unions' call to stage protest rallies across Africa's most populous country. Police shot dead a protester in Nigeria's commercial capital Lagos on January 9 during a national strike over fuel prices.
Protestors march on January 9, 2012 in Lagos during a demonstration against the more than doubling of petrol prices after government abolished fuel subsidies. Thousands of people heeded the unions' call to stage protest rallies across Africa's most populous country. Police shot dead a protester in Nigeria's commercial capital Lagos on January 9 during a national strike over fuel prices.
Abubakare Alimi, a protester who claims he was shot by a policeman, during protest against the ending of a government fuel subsidy on Jan. 1 receives treatment at county hospital in Ogba Lagos, Nigeria, Monday, Jan. 9, 2012. A national strike paralyzed much of Nigeria on Monday, with more than 10,000 demonstrators swarming its commercial capital to protest soaring fuel prices and decades of government corruption in the oil-rich country.
Protesters emerge from behind burning tyres during a protest against a fuel subsidy removal in Lagos January 9, 2012. Thousands of Nigerians took to the streets across Africa's top oil producing nation on Monday, launching an indefinite nationwide strike to protest against the axing of fuel subsidies.
>via: http://kickmugabeout.blogspot.com/2012/01/nigeriaunrest-in-lagos09012012.html
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Response to Ethan Zuckerman
on “Occupy Nigeria”
On January 1st, the Federal Government of Nigeria removed its subsidy on petroleum products. The price of fuel rose almost immediately from 65 Naira to at least 140 Naira, though I have heard the price hit over 250 Naira in some places. The removal of the fuel subsidy has unleashed mass popular anger, resulting in protests in different cities and plans for an indefinite national strike, which begins tomorrow.
The protests and the fuel subsidy controversy have generated a number of analyses.CNN, the BBC, and Think Africa Press have nice overviews of the situation.
The analysis that caught my eye though, was by Ethan Zuckerman, who directs the Center for Civic Media at MIT and is a renowned blogger. Although I have great respect for Zuckerman’s writing, in his piece on Nigeria he makes two arguments that I disagree with.
The first is that removing the fuel subsidy was a good decision. Zuckerman argues that the expense of the subsidy is a crippling burden on the government’s budget, and that the money would be better spent on building infrastructure. Zuckerman is, however, aware of some arguments against removal. He notes,
Given the history of corruption in the Nigerian government, it’s not hard to understand why many Nigerians are skeptical that the monies released from the subsidy will go anywhere other than in politicians’ pockets,
but he also says,
It’s possible to imagine a Nigeria where imported petroleum products were less necessary, if the country had functioning rail systems, a reliable power grid minimizing the need for generators, and refineries that could produce diesel and gasoline locally.
Zuckerman’s second argument is that the demands of the Nigerian protesters are out of sync with the broader global “Occupy” movement. Zuckerman writes:
I’m interested to see Nigerian take on some of the rhetoric and tactics of the Occupy movement, including the occupation of a public square in Kano. I’ll be intrigued to see whether any of the global energy over Occupy goes to support the Nigerian protesters. The irony, I fear, is that while the global occupy movement seeks to equalize income disparities and fight government corruption, the Nigerian movement [by this I think Zuckerman means the Jonathan administration - Alex] is currently pursuing radical and important reforms, and the Occupy Nigeria protesters are fighting against that change. Read one way, Occupy Nigeria is a conservative movement fighting to keep a dysfunctional status quo in place, which seems at odds with other branches of the movement.
I disagree with both arguments and I find their pairing strange. I also reject the premise of the second argument. I do not believe that just because some Nigerian activists “take on the rhetoric and tactics of the Occupy movement,” that makes the current protests a “branch” of the movement. The protest organizers and the controversy itself predate Occupy. Nor do I believe the politics of the fuel subsidy protests should be judged according to how they measure against goals of protesters in the United States and Europe. Nor, finally, do I believe that the fuel subsidy protests are “reactionary” or “conservative.”
In any case, is protesting the removal of a fuel subsidy really out of line with Occupy’s goals? I am not a member of the Occupy movement, but I thought one of its underlying values was to support the welfare of the “99%” over interests and policies that favor the “1%.” Yet the voices Zuckerman cites in support of fuel subsidy removal are those of the International Monetary Fund and some of the most powerful ministers in the Federal Government of Nigeria – these are voices more likely to speak for the 1% than the 99%, no? Contrast this with the voices speaking out against subsidy removal: labor unions, civil society organizations like the Nigerian Bar Association, students’ organizations, etc. These are more likely to represent the 99%, yes?
One could of course make the argument that the 99% don’t recognize their own true interests, and that the short-term pain they feel now is necessary for their long-term prosperity. But that sounds suspiciously like the arguments for austerity that have been invoked by the 1% around the world to justify slashing pensions, firing government employees, and other measures that always seem to add up to a lot of pain, but never seem to bring that promised shared prosperity for the 99%.
So will the removal of the fuel subsidy help or hurt the 99% in Nigeria? So far, the answer is that it is hurting them. The price of fuel has more than doubled, and has already begun to push the prices of other goods, especially food, upwards. People are struggling to get to work, to buy food, to put fuel in their generators at home and in their shops. The political uncertainty generated by removal, moreover, adds to an existing climate of tension and insecurity given ongoing religious violence in various parts of the country. If next week’s strike turns violent, it will most likely be members of the 99% who are injured or killed. Fuel subsidy removal has so far made life more costly, and less secure, for ordinary Nigerians.
Now, what about the future? What about the promised benefits of removing the subsidy? I agree with Zuckerman that the money could be invested into infrastructure and a broader transformation of Nigeria. But Zuckerman has no answer for Nigerians’ pessimism that the money will go to public goods instead of private enrichment. Zuckerman notes that there is corruption involved with the subsidy – but removing the subsidy is not guaranteed to end corruption, and could simply shift it elsewhere.
Nigerians’ pessimism seems justified to me. If we trace the latest round of the fuel subsidy debate back to last year, it really got going around the time that the Federal Government began insisting that state governments begin paying a newly passed minimum wage. Governors protested to the Federal Government that they could not afford to pay the new wage, and the idea of removing the fuel subsidy (re) surfaced, as a proposal to free up money (a related proposal was to increase the share of oil revenues that states received, in order to help them pay the minimum wage). Now it’s a new year, and the subsidy is gone, but some states are still being accused of dragging their feet on paying the minimum wage. If the promises of the past have not come true, how can ordinary Nigerians be expected to have faith that the money saved by removing the subsidy will benefit them? Moreover, if removing the fuel subsidy is a good and/or necessary step, why could it not be done gradually, so as to minimize the shock to people’s wallets and to the overall economy?
The fuel subsidy debate in Nigeria touches on core issues of government’s relationship with the people and of ordinary people’s struggles to survive in one of the world’s most politically turbulent countries. Political struggles over the subsidy predate the Occupy movement by decades, and even if the current protests are partly influenced by Occupy, or by the Arab revolutions, that does not mean that Nigeria’s protests have become merely one “branch” of a global phenomenon. Rather they are deeply rooted in histories and politics that are particular to Nigeria. The merits of removing the subsidy deserve to be judged according to how the decision affects the Nigerian people, not according to a supposedly universal political spectrum designed by activists elsewhere. And if there is a universal set of values to be invoked concerning the interests of the world’s 99%, the 99% in Nigeria seem to be speaking solidly in favor of keeping the subsidy.